There are numerous ways you can deduct auto expenses
■ Richard Perry / The Hemet Car Guy
When we think about cars, we usually think only about its costs. But at tax time, the dollars you spend on your car can actually end up saving you money.
According to the IRS, there are five major areas that qualify for deductions if you use your car for business, and you can lower your taxes by deducting expenses from your taxable income. The only catch is you must itemize deductions, not use the short forms.
Following are the main areas to consider for tax deductions:
1. If you use your car exclusively for business, you can deduct its entire cost. If you use it for both business and personal use, you can deduct only the percentage used for business, but you must keep records.
2. You can claim a tax deduction for the number of business miles driven, more than 50 cents per mile ($0.535 for 2017). The mileage must be recorded at the time of travel.
3. Instead of mileage, you can deduct a percentage of actual expenses:
Maintenance and repairs (e.g. oil, tires, etc.)
4. You may be able to deduct depreciation if the car is used for business. Some business people choose to lease a car, which can allow them to deduct the entire lease payment. In addition, you may also be able to deduct operating expenses.
5. Deductible non-business travel may be taken for charity work or for medical reasons, such as doctor appointments, and moving expenses at a lesser rate (17 cents a mile in 2017).
If you have legitimate auto deductions, you should claim them, but remember – in the event of an audit, you will need receipts and mileage records.
But don’t trust my advice, see your tax adviser.
The Hemet Car Guy
Richard Perry is The Hemet Car Guy and owner of VIP Auto of Hemet. For more information visit : www.hemetcarguy.info