Table of Contents
Standard mileage rate. For 2007, the standard mileage rate for the cost of operating your car for business use is 48½ cents per mile. Car expenses and use of the standard mileage rate are explained in chapter 4.
Limit on depreciation and section 179 deduction. For 2007, the first-year limit on depreciation and section 179 deduction for most vehicles has increased to $3,060. For trucks and vans, the first-year limit remains $3,260. There is no longer a higher limit for electric cars. Depreciation limits are explained in chapter 4.
Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.
You may be able to deduct the ordinary and necessary business-related expenses you have for:
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Travel,
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Entertainment,
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Gifts, or
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Transportation.
An ordinary expense is one that is common and accepted in your field of trade, business, or profession. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be required to be considered necessary.
This publication explains:
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What expenses are deductible,
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How to report them on your return,
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What records you need to prove your expenses, and
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How to treat any expense reimbursements you may receive.
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You fully accounted to your employer for your work-related expenses.
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You received full reimbursement for your expenses.
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Your employer required you to return any excess reimbursement and you did so.
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There is no amount shown with a code “L” in box 12 of your Form W-2, Wage and Tax Statement.
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Internal Revenue Service
Individual Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
National Distribution Center
P.O. Box 8903
Bloomington, IL 61702-8903
Publication
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225 Farmer's Tax Guide
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529 Miscellaneous Deductions
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535 Business Expenses
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946 How To Depreciate Property
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1542 Per Diem Rates
Form (and Instructions)
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Schedule A (Form 1040)
Itemized Deductions -
Schedule C (Form 1040)
Profit or Loss From Business -
Schedule C-EZ (Form 1040)
Net Profit From Business -
Schedule F (Form 1040)
Profit or Loss From Farming -
2106
Employee Business Expenses -
2106-EZ
Unreimbursed Employee Business Expenses -
4562
Depreciation and Amortization
See chapter 7, How To Get Tax Help, for information about getting these publications and forms.
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