Having your own vehicle is challenging but at the same time fun. Because of the continuous inflation in commodities, oil prices and service fee; thinking of ways on how you can possibly reduce your car expenses is beneficial.
If you are operating a car or truck, it is important to know that it is tax deductible if your purpose of driving is due to:
a. Business/ Work related
Business/Work related tax deduction falls when you go driving from your current place of employment to another site. This is an important thing to remember since driving from your home to office is not considered tax deductible. However, an exception would be an office that is located on your home and going to client/business from your home is considered tax deductible.
b. Medical/Health
If ever you or one of the members of your family get sick and hence consulted to a medical service facility that is considered tax deductible. Whatever the reason for as long as the sole purpose is obtaining medical service that can be considered tax deductible.
c. Charitable Purposes
Another car expense deduction is when you are engaged in charitable work.That means driving for a charity to help their cause, doing out of town missions from your churches or simply helping service from your community hospital.
d. Moving to a new location
Moving out? Don’t worry on your car expenses! It can be considered tax deductible if you move 50 miles farther than your current home location. Please consider the distance since it’s stipulated in the Moving Expense Deduction that you will be able to receive tax deduction if you’ll meet that criteria.
Have you ever wondered what are the expenses that can be deducted on your car/vehicle? The answer is the following:
1. Park fees and tolls
2. Gasolines/fuel
3. Insurance
4. Depreciation
5. Rental and lease expense
6. Vehicle registration etc.
Those are just examples of car expenses that can be deducted on your tax. It is also important to know the standard mileage rate and check the expense rate that can be deducted from you. Please check this link: Standard Mileage Rate section.
Sometimes, it would be better if you will just check on the Standard Mileage Rate section so you will be able to know how much you will get on your vehicle expenses. Doing so will also provide less paper works on your end. On the other side, if you want actual expenses rather than standard mileage, you can consult on the following different schedule depending on the purpose of use of vehicle (business, charity or medical).
Finally, it is really important to keep a good record of your actual mileage log so that you can have it prepared if you are intending to use Actual Expenses.