Tax savings for your business SUV

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(FORTUNE Small Business) -- Dear FSB: Must a work SUV be used only for business? If so, how can I prove it? Would you do a small table showing the actual savings by tax rate?

- Tim Kennedy, San Antonio

Dear Tim: "You could depreciate your grandmother," says David Gorsich, EA, of San Diego, Calif., "if they never ask about her. But the thing is, the IRS loves to ask. They know that people go kind of crazy with their cars. And they know that people are always trying to take something they have anyway and score big tax benefits from it. They love to ask questions about vehicles."

The IRS wants to see something that backs up your claim, explains Gorsich, who teaches tax law to professionals in his series of 'Brass Tax Presentations.' "Keep at least a rudimentary log of vehicle use," he says. "Building a record builds veracity." The log should be supported by other business records, such as receipts from places where you bought supplies or oil change records.

"I tell my busiest clients to keep a really tight log twice a year for three weeks as a kind of shortcut," says Gorsich. The IRS can extrapolate from those shorter periods. "That won't work, however, if you're in a highly seasonal business, using your vehicle for business for only short periods of time and sitting home, watching TV and eating bon-bons the rest of the time. It has to be representative of the entire year."

The IRS has heard all kinds of excuses, he says, so be sure to have proof if you're claiming a vehicle for business purposes, "so they're convinced it's not just a wild, seat-of-the-pants fabrication and not just another attempt to steal money from the general fund of the U.S. Treasury," he says.

Your vehicle doesn't have to be used for business 100% of the time, but you may only claim the percentage that you use it. For example, "if your SUV is used 80 percent of the time for business, you may only claim 80 percent of the amount of depreciation," says Jeff Berdahl, CPA, President of Berdahl & Company, P.C. in Center Valley, Penn.