Using Your Car for Your Small Business: Implications on your Taxes

There are all kinds of rules and regulations when it comes to deducting expenses for business vehicles on your taxes. But let's assume that you're not the CEO of a large corporation with a fleet of company vehicles. 

You're a small business owner using your personal vehicle for business purposes, and you want to know what kinds of deductions you're entitled to. If you keep accurate records of your mileage and auto repairs, this can be one of the biggest business deductions you make, and you're entitled to it even if you don't use the car for business a hundred percent of the time. How do you do the math? There are some important things to consider before you write off vehicle expenses which can help you get the maximum amount of money back, as well as make the process easier in the future.

1. The Standard Mileage Rate

There are two ways to deduct business vehicle mileage on your tax return. You can go with the standard mileage rate, which varies from year to year - it's 56.5 cents a gallon for 2013. You might think this amount is rather high, and it is, because choosing the standard mileage rate means you won't make separate deductions for vehicle repairs, insurance. or depreciation. It's all included in that standard rate. 

The standard rate is preferable for most average, economical cars, and it's important to remember that you must choose the standard rate the first year you use your car for business or you'll be forced to deduct that car using the actual expense method on all future tax returns. 

After the first year, you can switch back and forth between the methods, depending on how much your vehicle expenses are during the year. Most people prefer the standard mileage rate because it's much easier and only requires you to keep track of your mileage, not every cost you incur in relation to your car. If you drive a relatively affordable vehicle, it will more than cover the cost.

2. The Actual Expense Method

There are many reasons why a business owner might choose to deduct their vehicle expenses using the actual expense method rather than the standard rate. The most common reason is the fuel economy of your car. If you drive an SUV or van for your business, the standard rate might actually afford you much less money than what you truly spent on gas and repairs. Another reason is if your vehicle went through a lot of wear and tear that year and you want to deduct more money for repairs and depreciation than usual. 

Also, cars for hire services like limo or taxi companies must use this method every year. Whatever the reason, filing with the actual expense method will require a lot more math and a lot more records. You may need the help of a good accountant to go through your receipts and decide the right amount of money to claim for mileage, depreciation, mechanical work, insurance, and registration fees. Most people don't deduct actual expenses every year unless they drive an unusually large or expensive vehicle, but you might need to use it for certain years, depending on your circumstances.

3. Determining Your Business Percentage

If you have a car that you only use for business part of the time, finding out how much your deduction is can be a simple equation. You must keep track of your business miles throughout the year, and then multiply that by the standard mileage rate. To get the percentage of time you used your car for business, multiply the business miles by the actual miles. 

Some people think they can get away with claiming 100 percent of their vehicle use as business use, but the IRS can usually spot the difference. If you are audited, only an accurate mileage log will allow you to keep your deductions, including how much you spent on gas, for people filing using actual expenses. And only true business travel counts towards your business percentage, not commuting to an office, and not driving around with your company's phone number on your window. Making deliveries, meeting with clients, and even going to the post office can be considered business trips.

Figuring out business vehicle expenses can be a tricky business, which is why many small business owners need an accounting service to help them with this and other business aspects of their taxes. But once you get a handle on what you can write off and how, you might find that there are many rewards during tax season for small business, and deducting the cost of driving is one of the biggest. It's good to know the government can give you the help you need when you're trying to make your mark on the market.

Author Amy Thomson blogs for Monkey.co.uk. Check out her other articles at You can follow her on Twitter @VroomVroomAmy.

Practical Ways to Keep Your Marriage Strong After 50

According to the American Association of Retired Persons (AARP), divorces among people over the age of 50 have doubled since 1990. There are many reasons why the rates have skyrocketed, and understanding these reasons is one way to help maximize the divorce triggers. In addition to that, here are other practical tips for a happy marriage even until after your golden years.

Talk about it

One reason for failed marriages is avoiding issues rather than addressing them. Couples should get things out in the open and take time to talk to each other about anything that may be bothering them. If you think conversations like these will turn into shouting matches, you can always bring in someone else to serve as a mediator.

Laugh and smile

Humor plays a vital role in relationships, especially in long-term commitment. As you grow older, laughing and smiling are great ways to dissolve a heated situation. Instead of pointing the blame on each other, focus on laughing at mistakes. You can make fun of yourselves to resolve an issue and not take things too seriously. Laughter is the best medicine, right?

Practice selflessness

In some instances, all that is needed is a selfless act to rekindle a relationship. This little act of kindness goes to show how much you care for your partner. Remember, being selfless doesn’t mean losing yourself. Instead, it relieves moments from your younger days, when care was easier to express.

Spend time apart

When you retire, you and your spouse find spending hours and hours in each other’s company. While being physically together is beneficial, too much time together can also lead to feelings of suffocation. You may feel that you are no longer the same person. You can remedy this by doing things on your own, whether engaging in a new hobby without your spouse or spending time with friends. Short periods of separation can make the married couple's’ time together more meaningful.

Act like you’re dating

After many years of marriage, you often become less romantic with your partner. You may tend to forget the little details that made a relationship fun in the early years of being together. The sweet surprises, love notes, and flowers may slowly melt away after being together for some time. Now, in your 50s, make an effort to go on dates, exchange love notes and talk about what you love about each other. Cuddling, hugging, holding hands, and kissing is also a great way to show affection

Renew your wedding vows

Let’s face it. After 30 years of marriage, your wedding may only be a faint memory. To bring back the same passion you’ve felt during your wedding day, renewing your vows may be a great idea. You don’t need to spend so much like you did the first time, too. There are many resorts that offer all-inclusive vow renewal packages that are easy on the budget.

With the tips mentioned above, you can continuously enjoy a happy marriage and stay away from thoughts of divorce and separation.

About the author: Melissa Page is a professional writer based in San Diego, California. She writes about relationships and health on her group blog, Word Baristas. When she’s not writing, she’s bowling with her friends.

When Is It Worth it to Refinance Your Car? 4 Situations You Need to Consider Today

When it comes to getting your newly refinanced car loan, it is usually rather difficult to time these kinds of things perfectly. Having said that, there are still certain situations when it would definitely make sense for you to put yourself into a new car loan. You need to know when these situations arise because you will only get a certain amount of time to take advantage of them. Here are four different situations where refinancing your car loan could definitely make sense for your financial future. 

Interest Rates Have Gone Down

Any time interest rates go down, you should usually think about refinancing your car loan. Even if there is only a slight difference in the current interest rates when compared to the interest rates of the past, it is important to realize that the smallest difference can mean everything over the long term. If you are someone who is locked into a long term car loan, then you should always be on the lookout for a lower rate of interest.

An Improved Credit Score

An improved credit report is not really something that should catch you off guard. The fact of the matter is that you will have a higher credit score when you are able to pay off your debt and pay your bills on time. If you have been rather financially responsible over the past few months, then you may want to see if there has been an improvement in your credit score. Even a small improvement in your credit score can have a dramatic impact on your available interest rate.

You Didn't Shop Around

Whether you are trying to get the best car loan or trying to find California car insurance quotes from Worldclimate, it is important to remember that it always makes sense to shop around. If you did not take the time to wait for the best rate of interest when you were getting your new car, then you may want to backtrack a bit and do your shopping around now. Even if you think you got the best deal that you would be able to get, it still makes sense to take a look at what kinds of other offers are available right now.

Go Long Term

One last situation where it could make sense to refinance your car loan is if you need to lower your monthly payments. If you have found yourself in a situation where you cannot make your monthly payments, then lengthening your loan may be your only option.

4 Considerations to Make Before Financing Your Car

Buying your first car is a scary thing, actually buying any car is scary regardless of what number it is. Dealerships and lenders can also use jargon that you don't know. Consider these 4 factors before financing your car to make sure you get a good deal on a vehicle that meets your needs.

Know How Much Money You Can Spend

As a recent retiree or if your career is coming to an end, you probably have a lot of money for a down payment but don’t want to put your lifestyle at risk. That means you'll have the money for the down payment while leaving your investments in tact.

It's essential that you make a budget that tells you exactly how much money you can afford to spend on your vehicle. A good budget will include expenses and savings. Some items to put in your budget include your: 

• rent or mortgage payment 
• auto insurance 
• health insurance 
• food 
• entertainment 

You should also set aside at least ten percent of your earnings for retirement savings.

Once you have made your budget, you should know how much room you have for your monthly car payment. Don't exceed this amount. If you do, you'll have to reduce your spending in another area. That can make life difficult and less enjoyable.

Understand How Interest Increases Your Overall Car Payment

If you don't have an extensive credit history, then you might only qualify for a sub-prime loan. That means you'll pay higher interest than someone with a good credit score. This should influence how you see car prices.

Let's say you don't want to spend more than $15,000 on your car. If you qualify for a 5 percent loan with five-year term, then you should include the interest when comparing prices. A car priced at $15,000 will actually cost you close to $17,000 after you calculate interest.

That means you should look at cars with lower sticker prices or find a better interest rate. If you buy a car worth $13,500 with 4 percent interest, then you will spend a little under $15,000 over five years.

Explore Your Financing Options

Just because one dealership wants to give you a sub-prime loan doesn't mean that you can't get a better deal elsewhere. Your education and income prospects could qualify you for Lexus financing with an excellent interest rate. Then you can buy the car of your dreams without going over your budget.

Think About How Long You Plan to Keep the Car

$15,000 might fit into your five-year budget, but what if you plan to drive the car longer than that? Even pre-owned cars should last longer than five years.

Some people decide to budget more money to their car purchases because they know that they will eventually pay off the loan. If you drive the car for 10 years, then you could probably afford to spend $20,000 instead of $15,000.

If you know that you'll want to buy another car in five years, though, you should stick to what you know you can afford during the foreseeable future.

What other factors should buyers consider when they look into their financing options?