With tax time just around the corner, it’s important to make sure your records and planned deductions are in order. The NNA has previously covered some basic tax tips for Notaries, and Ryan Reeves, an accountant with A Notary On the Go in Florida, along with David M. Green, a Notary, IRS Enrolled Agent and owner of David M. Green Bookkeeping and Tax Service in Gettysburg, Pennsylvania, answer some frequently asked questions for mobile Notaries who want to claim a mileage deduction on their income tax.
These are general guidelines, and every person’s tax situation can differ. If you have specific questions about your income tax situation, contact the IRS or a qualified tax advisor.
What are the most important things Notaries need to do if they want to claim a mileage deduction?
The most important thing for claiming mileage/travel deduction is keeping good records.
IRS Publication 463, page 27, has a good example of a business mileage log that incorporates what information should be reflected in your records. Starting out, you will have to choose if you want to deduct actual expenses for travel or use the standard rate method. There are advantages and disadvantages to both methods and it will depend on your situation as to which is better.
What information should be recorded when keeping a record of mileage?
Your records, whether paper-based or using an electronic tool such as Notary Gadget, should adequately document the distance traveled, the date, and the business purpose of the trip. It’s also a good idea to record the vehicle odometer reading at the beginning and end of the year in order to get the total miles driven for the year. I suggest taking a picture of your odometer on the first and last day of the year.
What’s the most common mistake people make when claiming a mileage deduction?
The most common mistake people make is not adequately documenting the business purpose of trips or not properly separating personal mileage from business mileage.
Is there other travel-related information Notaries should record when claiming mileage deductions?
If you are using the actual expense method, then most of your other expenses like lease payments, depreciation, repairs, tires, oil changes, gas and insurance will be covered in the set rate. Otherwise, parking fees, registration fees, licenses, garage rent and tolls are tax deductible and should be claimed, though it’s important to note parking tickets are not deductible.
Anything else Notaries should know?
As of Jan.1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are: 53.5 cents per mile for business miles driven (down from 54 cents for 2016) 17 cents per mile driven for medical or moving purposes (down from 19 cents for 2016) and 14 cents per mile driven in service of charitable organizations.
David Thun is an Associate Editor at the National Notary Association.