Taxes are necessary. We all acknowledge this. But, let’s be honest: none of us want to shell out any more in taxes than we absolutely have to, right? At the end of the day, anything we can do to keep more of our earnings in our pocket is a good thing. And if your car is running, and you’re repairing it (that is, if you don’t have a broken down junk car), some of the expenses associated with your car are tax deductible.
If you itemize expenses on your tax return, you might be able to deduct some of your car’s expenses. If you’re using your car for business-related purposes, it’s often possible to write off your vehicle repairs and other car-related expenses when you file your taxes. You might be able to save a serious amount of cash. And, just think of what you could put that cash toward: a new car, a vacation, some outstanding debt…the list goes on.
Read on to learn more about how to deduct car-related expenses on your Federal income tax return.
Business use of your vehicle
If you use your car for business, you can deduct car-related expenses as business expenses. When you’re ready to claim your vehicle expenses on your tax return, you have two options.
First, you can claim what’s called the “standard mileage rate.” This rate changes annually, and is determined by the Federal government. For 2017, the amount is $0.54 per mile driven. If you decide to claim the standard mileage rate, you can’t claim any other expenses related to your car, so keep this in mind. Additionally, in order to claim any mileage, you’ll need to document that you actually drove those miles for business purposes. Usually, this can take the form of a simple logbook. Every time you drive your car for business purposes, write down the date, where you’ve driven to/from, and the starting and ending mileage. Subtract the starting number from the ending number, and the result is the number of miles you drove for that trip.
If you opt not to claim the standard mileage rate, you can deduct individual expenses for your vehicle. This includes fuel, oil changes, repairs, your annual registration, tolls paid while driving, new tires, and any other expenses directly related to the maintenance and operation of your vehicle. Depending on the year, how many miles you drove, and how much you spent on individual expenses, this may be better or worse for your overall tax picture than claiming the standard deduction.
You can also get a tax deduction by donating your car. To learn more about this option call [namebrand] and they can give you more information and some other donation options. They work all over the country including South Dakota.