Tax question for Realtors (percentage, leasing, cost, small business)

[Global Friend]

For your auto;

Do you use the mileage method or the actual cost method?

I recently went to a seminar regarding tax deductions and it sounds the "actual cost" method makes more sense for me. Am I understanding it correctly...
Keep records, receipts etc...Figure out what percentage of the time using your car is for real estate and then deduct that amount.

So if expenses are $5,000 for the year and 80% of the time is for real estate then I can deduct $4,000?

[DMenscha]

I go with the mileage allowance offered by the IRS. It's simpler for me to not have to account for every single purchase at the end of the year. At .50 per mile, 12K miles per year that's $6000 worth of deductions. My accountant tells me to use the entire mileage from my principal vehicle and to consider my other car as my personal mileage car.

Your example is correct, you would deduct $4K

[kevcrawford]

I go for mileage too. My accountant told me that 99% of people don't keep their mileage because they're lazy, but the ones that do usually get to deduct more.

[Greatday]

I do mileage.

[south.charlotte&union]

I did mileage last year (2006) -- worked well for my situation then. But both cars I used at that time were old (and paid off -- yippee!) and I really needed a newer one for my business. Talked to my accountant, and for my needs I ended up leasing a car that I use ONLY for business (my husband has driven it ONE time in the past year and a half, to pull it into the garage ) So we'll see where 2007 leaves me using actual cost...will keep you all posted.

[PghREA]

DH is a CPA and I work with him. In all types of small business, the milage method works out to be the greatest deduction in 99% of the cases.