When it comes to deducting a company’s auto expenses, mileage is often a business owner’s first choice because it’s the most known practice. But it may not be the best option for you. Instead, you might go the “actual expense” route, which involves factoring in depreciation. This option may be better suited to Truck or SUV owners, as well as those leasing or electric car owners. Bottom line: too many small business owner don't take advantage of this deduction and leave dollars on the table as a result. Here is a basic explanation of your options and should open the door for a strategic conversation with your tax planner.
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Mark J. Kohler, a certified public accountant in Irvine, Calif., is a partner in the accounting firm Kohler & Eyre, and the law firm Kyler, Kohler, Ostermiller, & Sorensen LLP, specializing in business, estate and tax. He is the author of What Your CPA Isn't Telling You from Entrepreneur Press.