There are a number of things that you might be able to do in order for tax write-offs on your car. There are many people who are unaware of these write-offs, and so they end up missing a valuable deduction. These write-offs are usable especially for people of businesses, charity and medical expenses.
Part of charity deduction can also include running any errands for a church. In order to deduct for this, you have to be writing down the miles that you are driving. This is why it can be useful to have a journal nearby to write how many miles you have driven for the charitable organization.
2. Medical Expenses And How Many Miles Were Driven
There are many people who are unaware of this, but medical expenses can be tax deductible. That is, they are tax deductible when exceeding 7.5% of the adjusted gross income. Simply record the number of miles that you ran, and you will be able to deduct it off on your taxes.
3. The Business Use Of A Vehicle
This can include usage by either any employees or the owner of the business. Like the other write-offs, you will need to keep a journal of the miles that you ran for the business. Keep in mind that the mileage deduction rate is subject to change every year.
In order to receive these mileage deductions, the tax payer must maintain a written record that includes personal use and the miles driven for a charitable organization, business or health expenses.
4. What To Know When You Buy A New Car
If you planned on buying a new car anytime soon, then remember that the sales tax can be used as a write-off on your taxes. If you always wanted to buy a new car, then here is an extra reason.
5. Have You Bought An Energy Efficient Vehicle?
When you buy an energy efficient vehicle the government will provide you with what is known as a tax credit. Energy efficient vehicles will include an electric car or a hybrid car (which runs on gas and electric). Check your original car owners manual to verify just how energy efficient your new vehicle is.
You may be wondering, what is a tax credit? Well, a tax credit is something that is very useful. A tax credit will reduce what you are paying on your taxes dollar by dollar. If you were to get a $7,500 tax credit, then that could be used as a write-off. The government has done this because it helps to make these cars more affordable to the average consumer.
6. Registration Fees And What You Probably Didn’t Know
When you pay for any registration fees, the government allows you to deduct what was paid off onto your federal taxes. In order to do this, you need to itemize your tax deductions on the return in order to claim. Keep in mind that this may not add up to much, but if you receive enough deductions like this you will be able to reduce your overall tax reliability.
There are many deductions on a vehicle available that people are not aware of. Some of the deductions are quite minor, but it is oftentimes the small deductions that add up into the big deductions given enough time.
Joseph Fitch is an alert consumer and a certified tax preparer in Los Angeles, CA.
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