Here are the top tax tips related to cars, transportation and automobile.
All Your Car’s Expenses – Not Just Mileage!
If you take the actual expenses, you can deduct the depreciation, gas, oil, insurance, tires, licenses, repairs, etc. If you choose to take actual expenses when you first start using the car for business, you cannot change to the standard mileage rate deduction. In other word, when you select a method, you can’t change midway.
The standard mileage rate is the simplest method. However, if depending on your level and type of car expenses, the actual expenses might be more advantageous.
If you use your car for business purposes, you may deduct 57.5 cents per mile for mileage expenses for the 2015 fiscal year. Be sure that you keep a written record of your total mileage and business mileage.
Other Mileage – Charities and Medical
In addition to business mileage, did you know that other types of mileage are deductible if you can itemize? If you are involved in charity or volunteer work for a non-profit organization, you can deduct your mileage at 14 cents per mile. The mileage to and from a doctor or dentist’s office is deductible at 23 cents per mile.
Passenger Automobile Depreciation Limits
The IRS defines a passenger automobile as any four-wheeled vehicle made primarily for use on public roads that has an unloaded gross vehicle weight of 6,000 pounds or less. The depreciation limit for most passenger automobiles placed in service between 2012 and 2014 is $11,160. This limit must be reduced if the business use is less than 100%. See the official IRS tables for detailed informations.
Trucks and Vans
The depreciation limit for trucks and vans (including certain sport utility vehicles) used as passenger automobiles that were placed in service in 2014 is $11,460. This limit must be reduced if the business use is less than 100%. These deductions charge after the first year. See the official IRS tables for detailed informations.
Sport Utility Vehicle
The maximum section 179 deduction is limited to $25,000 for certain sport utility vehicles (SUVs) weighing no more than 14,000 pounds. This applies to SUVs placed in service in 2014.
Electric Vehicles And Clean-Fuel Deductions
In the past, circa 2005-2006, to promote the adoption of environmentally friendly automobiles, the IRS offered deductions for electric and clean-fuel vehicles. You may be able to take a credit of up to $4,000 when you purchase a qualified electric vehicle. You may be able to deduct up to $2,000 when you purchase a clean-fuel vehicle. These deductions are available on certain vehicles only from 2005 and 2006.