Your car can double as your work vehicle, and when it does you want to make sure that you are keeping track of your work use of it. You can actually get some tax deductions for your vehicle, even when it isn’t used only for work. However, you also can’t just use the mileage to and from an office as a deduction. There are a lot of rules that go into it.
If you don’t have a vehicle at all and you drive to business meetings or drive around to distribute your wares, you may want to invest in one. Even if your credit isn’t so good you can get a car loan, and your vehicle will save you some money on taxes from purchase on out.
Designating It For Work
If you designated your vehicle as a work vehicle all the time, then every expense you have with it can be deducted for your small business or freelance/contract work. If you still use it for regular activities, like taking the kids to school or going grocery shopping, you need to determine how much time your vehicle is a work vehicle.
Gas And Mileage
When you drive to business meetings, drive to places that you’re conducting any business at, you need to be keeping track of your mileage, and holding onto the receipts you get from the gas station when you fill up. It is useful to keep good details, which might mean keeping a little notebook in your glove box and using the trip counter your vehicle comes equipped with. Mark receipts for which trip they were for.
Whether you’re doing your own repair work on your vehicle or taking it into a garage, you need to keep your receipts from parts and labor. Since your vehicle is an integral part of your business, keeping it on the road is important. That means that you can use repair costs as a right-off as well.
Sometimes even general maintenance can get you a tax write-off. You can’t drive it to a meeting with a flat tire, so keep the receipt for new tires. If you hold onto all receipts that are car related, you can sort through which ones you need and which you don’t with your tax accountant at the end of the year.
Making Work Travel Easier
Having a work vehicle can simply be a good investment if you spend a decent amount of time on the road. If you deliver your own monthly magazine to local businesses, all of those stops will add up if you’re taking a taxi or Uber. If you ride the bus it could take you all day to make your deliveries, ones that could have taken an hour had you owned your own work vehicle.
Originally posted on March 30, 2017 @ 11:07 pm