How to Claim Deductions for the Business Use of Your Vehicle
How to Claim Deductions for the Business Use of Your Vehicle
One of the most common tax deductions for those who have a business is the use of a vehicle. If you use your vehicle for business then depending on your situation, you could reduce your business income significantly. That could be a big boost to your tax situation.
By reducing your business income you could save on both your personal income taxes and your self-employment taxes. Here’s what you need to know about claiming your vehicle expenses as a deduction to help you save more on taxes.
When calculating your vehicle tax deductions, you have two options. You can use the Actual Expenses Method, which are the exact expenses you incur when using your vehicle for your business. But you can only claim the percentage of expenses used for business purposes not personal. These include:
- Fuel and oil
- New tires
- Car washes
- Insurance
- Depreciation
The other option is to use the Standard Mileage Method. With this method you need to track all the miles you use your vehicle for business purposes. Then you multiply your business miles by the amount designated by the IRS. For the 2018 tax year, that’s 54.5 cents a mile.
Either way, if you use your vehicle a lot for business, keeping track of and claiming your expenses could save you a significant amount at tax time.
We hope you found this article about “How to Claim Deductions for the Business Use of Your Vehicle” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
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Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
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The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
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