Whether you are self-employed and also use a car for business reasons. You can get a tax deduction on the cost of the car from your taxable income.
Cars are one of the most expensive items a person can own, and it requires a regular investment for maintenance. Thankfully, there are tax deduction available and we will cover them in this post. If you have any queries regarding any areas of Tax Preparation Services contact AATCA to resolve all your tax related doubts.
Who Qualifies For A Tax Deduction?
Owning a business or being an employee and using a car gets very expensive; the IRS allows certain expenses to be cut off from your tax returns while filing your tex reports. You can avail this provision by proving that your personal, business, or work qualifies for a personal tax deduction. This can be done in the following ways:
Charitable Contributions
If your old car is no longer fit to be used, then consider donating it to charity. This will give you a deduction on the market value of the car. Make sure to get a receipt from the charity with the value of the car written on it. This can impact your deduction on your business applications. But only few people do that.
Electric Cars
The IRS provides credit for battery operated cars. If your car was purchased after 2009, you are qualified to apply for this credit.
Conversion
Tired of the emissions from your car? You can now convert it by purchasing an electric drive conversion kit or hiring a mechanic to install it. But its maintenance cost would be high.
Business Deduction
If you are a freelancer or own a small business, you can deduct the cost of your business use.
Tip: Track your mileage to distinguish from personal use and tax deductible business use.
Business Expenses
If you are working for a company and using your personal car for business purposes, you can claim those expenses if your company hasn’t reimbursed you.
Business Fleet Deduction
If you own a business and use a car for your business uses, you can deduct the expenses on your yearly taxations under operating costs.
Tip: Keep a record of all the expenses as an estimated cost won’t be accepted by the IRS.
Contact our Professional Tax Advisers for more information at +1 770-280-1082.