Car Expenses and your taxes
When people think of cars and finances, they generally see their vehicle as an expense item. However, if you use your car for business purposes, you may be able to get a break on your taxes by claiming car costs.
Here’s how it works: If you use your car only for business purposes, you may be able to deduct the entire amount of eligible operating expenses. The majority of us don’t use our vehicles solely for business purposes. However, if you use your car for business purposes even part of the time, you may be able to deduct the expenses on your taxes.
The Internal Revenue Service outlines two methods to claim auto expenses: the standard mileage rate and actual expense rate. The most advantageous method for you will depend on your individual circumstances.
The mileage rate changes periodically and can be found on the IRS website. Here are some of the types of expenses you can claim if you use the actual expense method:
• Gas
• Oil
• Auto repair service
• Tires
• Insurance
• Registration fees and licenses
• Depreciation attributable to business use
Check out the IRS website for more information on auto-related tax deductions or consult a qualified tax advisor of your choosing. Remember, your eligibility for expenses depends on your circumstances. However, if you use your car for business at any time, it’s well worth your while to explore the possibility of claiming eligible expenses.
