Routine car maintenance, increasing fuel costs, and unexpected car repairs add up quickly, how would you like for your car to pay you back this year? I bet we have your attention now, don’t we?
According to Intuit’ TurboTax there are several auto related tax deductions that tax payers can take advantage of. We’re not going to go into detail on any one topic, other than how important it is to keep detailed mileage reports, but we do encourage you to visit Intuit’ TurboTax article, “Driving Down Taxes: Auto-Related Tax Deductions,” for more information.
Did you know that even if you use your car for business and personal use, you can still take advantage of tax deductions? You just have to be more thoughtful and meticulous about it than the average tax filing bear. The ruling is if you use your car 75% of the time, you’re allowed to deduct 75% of auto related expenses, and so on.
There are several mileage-related tax deductions available, including mileage traveled to attend sales meetings or to the airport for business related trips and to buy office supplies. The IRS will also allow you to deduct mileage traveled to and from temporary assignment locations. However you are not eligible for tax deductions if your employer reimburses you for mileage. For more information on the current standard mileage rate, visit IRS Publication 463, Travel, Entertainment, Gift and Car Expenses.
Auto related expenses include gas, oil, repairs, registration fees, insurance, lease payments, and even parking fees, as long as you are able to provide highly detailed logs and receipts for all expenses.
What should you include in your logs? We’re glad you asked. Whether you decide to keep notes using a spreadsheet, notebook inside of your car, or mobile device, make sure to include the client or business you were visiting, purpose of the trip, the job being worked on, as well as any other information you can provide. Remember, less is not more when it comes to the IRS and details.
Don’t have time to track your own mileage? Let us do it for you.Use the Clutch Optimized Driving app, no pen and paper required.