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Effective: December 1, 2006 |
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20.25.20.20ar1 - Transportation (Archive) |
Archived: February 1, 2010 |
Transportation expenses are a business expense incurred while away from home in a travel status.
The following transportation business expense information is for MA and GAMC only.
Allowable Transportation Expenses.
Self-Employment Transportation Expense - MA Method A.
Self-Employment Transportation Expense - Method B.
Allowable Transportation Expenses
Allowable self-employed transportation expenses, which can be deducted from countable self-employment income include:
l Gas and oil costs.
l Parking fees.
l Vehicle insurance.
l Vehicle repairs.
l Interest payments on the vehicle loan.
The policy on how to determine the amount of the transportation expense is different for each method. However the following is true for both methods:
l Do not allow the cost of travel between the self-employed person's home and place of business as a business expense.
l Personal use of transportation is not a business expense.
l Prorate the cost of transportation used for self-employment and personal needs based on the percentage of use for each.
The IRS Mileage Rate is also known at the flat rate for self-employment transportation. The rate does change. See IRS Mileage Rate for exact figures.
Use the IRS mileage rate to determine the amount spent for self-employment transportation.
Note: Use the flat rate even if the itemized self-employment transportation costs exceed the flat rate amount.
Self-employed people may choose either of these ways to calculate the transportation expense:
l The flat rate deduction.
Note: If a client chooses the flat rate, use this amount even if it is greater than actual itemized transportation expenses.
l Itemize actual transportation expenses.