I just finished hosting Vicky Collins for our monthly Circle of Pet Sitting Excellence teleseminar. Vicky is a CPA and tax deduction specialist and on our call she explained which expenses you can claim as legitimate pet sitting deductions and exactly what documentation you should keep to justify each expense to the IRS.
We covered the two most audited expenses in detail – vehicle expenses and home office deductions. We also discussed travel expenses, supplies, cell phones, internet, and training and seminar costs.
The deduction that I find the most difficult to document every year is vehicle expenses.
If you use your car for pet sitting but also for personal use then the way you need to document car expenses is to keep a mileage log that shows the start location, end location, number of miles travelled, and the business purpose. You can use a store bought vehicle logbook or make your own tracking sheets using excel. If you use this mileage method you don’t need to keep reciepts for gas, maintenance etc. At the end of the year you total your business mileage and mulitply this by the annual mileage rate (different each year and set by the IRS).
If you have a car that you use exclusively for pet sitting business – then you can actually claim the expense of purchasing the car (you can’t claim all in one year but you can depreciate over several years), insurance, gas, maintenance etc. You do have to keep all the receipts if this is the method want to use to claim your vehicle deduction.
One of the important tips Vicky gave was to have proof of your vehicle odometer reading at the end or start of each tax year. Close to December 31st or January 1st you want to either – have a service done on your vehicle and keep the reciept that shows the odometer reading or use a digital camera that puts the date on the photo to take a picture of your car odometer. If you claim any type of vehicle expense the IRS will want to see this proof if you are audited.
Vicky has a newsletter that you can sign up for at her website – http://www.deductiondiva.com where she gives tips and will keep you up to date on any tax law changes during the year. When you sign up for this newsletter Vicky will also send you a copy of her Tax Documentation Checklist. On her website Vicky also offers filing aids to help you keep track of all you business expenses during the year – so you are not digging back through a stack of receipts at tax time.
The information on this call could save you big on your 2009 return by making sure you don’t miss any deductions that you are eligible to claim this year. To get the full recording and written transcript only costs $9.95 to try out the Circle of Pet Sitting Excellence membership. Join in December and be entered into the drawing to win a free website review – and also get immediate access to my full library of over 12 past monthly call recordings, transcripsts, special reports and articles.
To find out more info or to join go to http:/www.petbusinesssuccesscircle.com.