Welcome to Straight Talk. We at Legacy Legal and Family Legacy Trainings appreciate your enjoyment of our weekly insights on Mastering the Legacy Hierarchy, Building a Legendary Future and Creating Lasting Wealth and Legacy.

Over the next 10 weeks I want to share some basic tax tips that can be used for year end planning or thinking about your taxes for next year.

Review All Articles in This Series: 10 Tax Tips


They say nothing is free. I think there may be one exception to this rule. That is the mileage allowance. The IRS gives you this one, free. The allowance is 56.5 cents per mile when you use your car and drive for business. In fact you get a choice. You get to compare the actual cost of driving the car plus depreciation on the car against the standard mileage rate. Whichever is better is the one you get to select. Whatever selection you make, however, you are locked into that selection and you can’t change it.

Here is a simple example. If you drive 20,000 miles for business you get to take a deduction of 10,650 dollars on your tax return. If you are in the 30% tax bracket this will save you a little over $3,000 in taxes. Free. By comparison, if your total out of pocket gasoline, tires, repairs and insurance costs plus some depreciation total $8,000 during the year, then the standard mileage rate will be a better choice.

The IRS does require one item of proof should you be examined. This is a mileage log, diary or some type of account book. The mileage log is a record of where you went, when you went, how many miles you drove and the purpose for the trip. Otherwise, there is no proof that you actually drove the number of miles claimed or the reason for the trip. The lack of proof is why the IRS will disallow the deduction. So keep a mileage log.

Reconstruction of the mileage or an expense is permissible. This means that if you didn’t keep a mileage log but you have a calendar and you can show from the calendar the meetings you attended this should suffice. For example, if I have to go downtown to appear in court on a case, my calendar will show that and I can justify the number of miles spent going to Court.

There is a technical rule in all of this that travel from your home to your office is considered commuting miles and that portion of the drive is not a business auto expense. Only expense from the office to the client’s place of business are allowed. I know what you are thinking. Don’t kill the messenger. I didn’t make this stuff up.

Our vision is to enhance the way people think and talk about wealth not only in money, but in values, beliefs and traditions. Our mission is guiding people in Mastering the 5 Stages of Wealth. Survival to make ends meet; Security for themselves and their family; Affluence by enjoying the benefits of the wealth created; Influencing others through one’s own clarity of purpose and vision; and Legacy of the impact and difference you can make in the world and how you will be remembered.

Thank you for being a part of our Straight Talk community. What stage of wealth are you in? What can you do to get to the next Stage?

© 2015 Legacy Legal Inc. | YOUR LEGENDARY FUTURE, TODAY!