How Your Vehicle Can Help You This Tax Season
These days, everyone is looking for some type of tax deduction. Have you looked at your vehicle? Chances are, you can use your car or truck this tax season. Of course, there are a few caveats. First and foremost, you need to use your vehicle for business. Maybe you are self-employed or offer ride-sharing services. Furthermore, there is also a vehicle sales tax deduction. Let’s explore both options.
Self-Employed or Ride-Sharing Tax Deductions
As a self-employed worker, you’re well within your rights to take tax deductions for any driving expenses. In doing so, you could significantly lower your taxes for the current year. There are two ways to do this:
- Standard Mileage – Multiply your business miles by the standard rate, which changes year to year. This rate includes driving costs, gas, maintenance, and depreciation.
- Actual Expenses – Alternatively, you could track your driving expenses manually, which can be difficult and time consuming.
- If you work for a ride-sharing company, such as Lyft or Uber, then you’re essentially self-employed. The most important thing to track, however, is your mileage. That’s where you’ll see the biggest tax benefits.
Sales Tax Deductions
The other way to save money is via the vehicle sales tax deduction. When you buy a vehicle, you can deduct the sales tax—only the state and local—on your next tax filings.
You should only take this route if you paid more in state and local sales tax than from state income tax, though.
At the end of the day, you can make your luxury vehicle work for you and reap the rewards during tax season. Keep your car running smoothly with luxury car maintenance from Krause’s Automotive. Make an appointment by calling 972-221-8743!