April 15 definitely feels like it happens more than once a year. By this we mean that it seems like right when we get past one tax season, it’s here again. We have to talk to our accountant. We have to get our receipts together. And we have to do our research to see just how many items that we can write off.
Well, if you happen to be someone who has a company car or uses your own vehicle for business purposes, you’re in luck. Over the course of the next few minutes, we’re going to share with you some effective tips for how to write off business-related vehicle expenses below:
Know what qualifies as a business-related expense. There are some people who think that they cannot use their car as a business-related tax deduction simply because they don’t use it solely for company purposes. But the reality is that whether you purchased a car just for business reasons or you happen to use your car from time to time to do things like pick up clients from the airport or run business-related errands, you can write off some of the relevant expenses. One device that can help you to keep your personal and business runs separate is CarCheckup. By attaching it to your vehicle, you can monitor things like gas mileage when you’re in your car doing company work.
Know how much it costs to actually operate the car. If you have a company car, something else that you can do is deduct some of the operating costs of the car. This would include everything from gas and tires to insurance and registration and license fees. Just be sure that you have receipts for these kinds of expenses so that you can prove how much you paid for them.
Know how you can write off gas mileage. Something else that you can write-off is the gas that you spent while using your car for company-related reasons. One website that can further explain how you can qualify for this kind of deduction is 1040.com. Just go to the site and put “business use of car” in the search field.
Know that you can deduct for depreciation. You might be surprised to know that if you have a company car, you can actually write off some of your car’s depreciation value. In fact, according to Turbo Tax, the standard tax deduction amount for 2013 was 16,202 miles x 56.5 cents per mile = $9,154.
Know what the IRS guidelines are. Say that you live in Denver, you just bought a company car and you’ve been online looking at car insurance rates. While you’re finding an insurance company that fits into your price range, don’t forget to stop by IRS.gov to see what the specific guidelines are for tax deductions for your new company car. Being that the IRS is known for sometimes changing some of their stipulations, it’s good to stay abreast of their tax laws each year. For more information on writing off business-related vehicle expenses, visit IRS.gov and put “business use of car” in the search field.