Do you keep track of your miles for work? If you don’t you should for several reasons. It is especially important if you receive a 1099-Misc for payment. In hard economic times, some companies are looking to hire part-time workers so they are not responsible for providing full benefits. This also means that you have to pay self-employment taxes. However, there are many benefits to filing a 1099-Misc as well.
You must complete a Schedule C for any payment received for work where taxes are not taken out. The Schedule C is a form for owning your own business, and many expenses can be written off that are pertinent to your line of work. Just a few deductions include supplies, marketing, use of your home, and mileage.
Luckily, the IRS recognizes that transportation is a vital element to any job. On July 1st, they increased the mileage rate by 4.5 cents to 55.5 cents per mile. For any mileage driven for business during the first six months of the year, the rate is still 51 cents per mile. Depending on your mode of transportation this can make a huge difference.
Even if you do pay taxes through your employment, you can deduct mileage for the use of your car. Some companies even want you to track mileage so they can deduct it from their total taxes they must pay. When you are ready to file your federal and state taxes, Rhodes-Murphy has all the necessary tools to make sure you get the biggest refund.
The new legislation is not just for business use. More improvements are included in moving expenses. The IRS will increase 4.5 cents to 23.5 cents per mile. In all cases where you use your car, keep a log of your mileage on trips that you think can be deducted for filing taxes. Please contact Rhodes-Murphy if you have questions about mileage deduction eligibility.
