you must keep a record of miles driven specifically for business. If you choose the stan-
dard mile rate, you must use it for the first year the vehicle is available for business use.
In subsequent years, you can change to actual expenses, if desired. For leased vehicles, if
the standard rate is chosen, it must be used for the entire lease period.
Accounting for actual vehicle expenses is an alternative to using the standard mileage
rate. It’s more complex and requires more record-keeping, but may be a better alternative,
depending upon your situation. Actual vehicle expenses include depreciation, lease pay-
ments, registration fees, licenses, gas, oil, insurance, repairs, tires, tolls, parking fees, and
garage rent.
Finally, if your vehicle is used for both business and personal transportation, you
must record how much mileage or actual expenses went toward business/band/music use.
For detailed information about travel and transportation deductions, download a free
copy of IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses at http://www.irs.-
gov.
Depreciation
Mention the word depreciation to most musicians and you can see their eyes begin to
glaze over. But in its basic form, it’s not that tough of a concept. Although your accoun-
tant will make recommendations about depreciation, it’s good to at least have a working
knowledge of the concept. Also, having an understanding of depreciation helps a business
owner plan larger purchases so the timing provides the best tax advantage.
Let’s start with a definition. Depreciation is defined as a portion of the cost that re-
flects the use of a fixed asset, a practice amp, for example, during an accounting period.