By: Martin M. Shenkman, CPA, MBA, JD

Instead of calculating the maintenance, repair, depreciation and other costs of using your car in business, you can simply multiply the business miles driven by an IRS allowed rate to calculate your deduction. The expense which you can deduct for each mile driven for business purposes has increased to 48.5 cents/mile for 2007. Rev. Proc. 2006-49, 2006-47, IRB 2006-168. If you reimburse your employees at this rate, the reimbursement is tax free if the employee corroborates the time, place, business purpose and mileage of each trip.

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