Today TaxMama hears from Cindy in Kentucky who is skeptical: “I own my own business and travel a lot. I am deducting a truck that I own. With high gas rates can I deduct a car?
My accountant has told me that I can only deduct a truck? Can you explain what my options are on deducting a vehicle?
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You are entitled to deduct the business mileage OR the business expenses for any vehicle that you USE for business.
So if you want to deduct both the truck costs and the vehicle costs, you’re going to need to keep very careful track of the mileage on each vehicle.
You’ll need to track the personal use and the business use. Then, you’ll be able to use a percentage of the total costs, or the business miles times the IRS mileage rates during the year.
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You’ll find more information about car and truck expenses in IRS Publication 334:
And there’s a great deal more detail in Chapter 8 of Small Business Taxes Made Easy, with a clear explanation and some good tricks and tips to maximize vehicle deductions.
If you need a good tool to help you track more than one car, pick up the Tax MiniMiser and keep it with you – or put a set of envelopes into each car. https://www.taxminimiser.com
Now, it’s just possible that your accountant isn’t permitting you to take deductions for both vehicles because she knows more about your driving patterns than I do.
Read the information that I gave you and go back and have a better informed conversation with your accountant or tax professional.
And remember, you can find answers to all kinds of questions about auto expenses, and other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
- IRS Publication 334 :: Deducting Vehicle Expenses
- Small Business Taxes Made Easy :: Chapter 8 – Vehicle Expenses
- TaxMiniMiser :: Easy, Low-Tech Recordkeeping Tool