By Jim Droz
Most real estate agents and brokers spend a lot of time in their car, with some agents logging more than 20,000 miles a year for business purposes alone.
Fortunately, local transportation costs are deductible as business operating expenses if they are ordinary and necessary for your real estate business. It makes no difference what type of transportation you use – car, SUV, limousine, motorcycle, taxi – or whether the vehicle you use is owned or leased.
If you drive a car, SUV or van for business, you have two options for deducting your vehicle expenses: use the standard mileage rate or deduct your actual expenses for gas, depreciation and other driving costs.
Most people use the standard mileage rate because it is simpler and requires less record keeping: You need only to keep track of how many business miles you drive, not the actual expenses for your car, such as the amount you pay for gas.