INSIGHT INTO VEHICLE DEDUCTIONS & HOW TO USE THEM THE RIGHT WAY
Let’s face it, we normally spend more time in our vehicles than anywhere else… especially in South Florida traffic. Pre-COVID, that meant traveling to meetings, having lunch, picking up clients, the list goes on and on. Some business owners are still having to travel as much as they did before the pandemic but as we continue to make strides towards normalcy, time on the road will likely increase for the rest of us.
What does that mean tax wise? It means when used correctly, you can deduct your vehicle as a business expense!
There are some important questions you need to ask yourself:
Should you buy or lease?
Who should own the car, you or the business?
Should you use standard mileage or actual expense?
Answering these questions is half the battle.
What do we recommend? Well, it depends!
I know we don’t really like that answer but the reality is that as tax professionals, we should be determining this based on each individual’s specific tax situation.
There isn’t a one-size fits all approach to taxes and if you’re using someone that takes the same approach with everyone and makes a recommendation without knowing YOUR particular situation, it’s time to look elsewhere!
Here are vehicle-related expenses that can be deducted at tax time:
Gas and oil;
Maintenance and repairs;
Registration fees and taxes;
Vehicle loan interest;
Rental or lease payments;
Tolls and parking fees.
It doesn’t have to be complicated. Make sure to keep good records and save all the receipts.
Still have questions? Contact me!