Which automobile expenses are deductible? You may have a deduction coming for any of the following vehicle uses: business, charitable activities, medical travel, or moving expenses.
Do you use your car for business trips? If so, you’re entitled to deduct your automobile expenses attributable to business driving. However, there are several twists and turns along the way. For starters, you can’t deduct the cost of commuting back and forth from work. This is a purely personal expense. But trips between your regular workplace and a client’s business location count as business travel. In addition, you may deduct expenses for traveling between different branches of your business.
There are two basic ways to deduct business auto expenses: the actual expense method or the standard mileage rate.
Two methods – What can you deduct?
Note that with either option, other special tax rules may come into play.
If you drive your car on behalf of a charitable organization and there is no element of personal pleasure, recreation, or vacation involved, you may deduct either your actual vehicle expenses or the standard mileage rate for charitable driving plus parking fees and tolls.
If you drive to obtain medical care, you may deduct either your actual vehicle costs or the standard mileage rate for medical driving plus parking fees and tolls.
If you use your car in a tax-deductible move, you may deduct either your actual out-of-pocket expenses incurred or the standard mileage allowance for moving plus parking fees and tolls.
The rules governing vehicle deductions are full of exceptions and limitations. To be certain you use the method that’s right for you – and that maximizes tax savings – give us a call. We can review your situation and your options with you.
It’s hard to believe that we are already into July. Even with the deadline for filing your return and making a payment (if you owe) being extended to July 15, 2020, it still seemed like it came upon us fast. With only a few weeks left, be sure to get any final documents to us and answer any outstanding communications immediately.
New gardeners have come out of the woodwork this year, looking to create a sustainable food supply in their own backyards. Of course, not everyone has the space or the time to create a full-on outdoor garden. So, why not start small…and indoors?
It’s safe to say that most people are laser focused on money right now—specifically on how to make it last longer. To help you do just that, we compiled the following list of tips for spending less in 2020: