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Drive Down Your Taxes This Year

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It’s tax season which equals stress for many of us. You’re pulling together loads of documents, trying to figure out the tax code updates and working to minimize the amount you pay in taxes. We’ve compiled some information about auto-related tax deductions that may apply to you.

Are You All Business? Or Business and Pleasure?

If you have a car you only use for business, you can deduct the entire cost of operating that car (within limits). The IRS offers two ways to deduct expenses: standard mileage and actual expenses. The IRS recommends looking at both options to see which one will give you the largest deduction. If you have a car that you use for both business and personal use, you are limited to deducting expenses related only to when you use it for business. More information can be found on the IRS website to help you figure out the best way to proceed.

Attention Commuters!

Darn it. The IRS feels that where you live and where you work is a choice and you can’t deduct your commuting miles or expenses, like tolls and parking. There are a few exceptions such as travel to a temporary work site or if you travel to multiple work sites on the same day. Intuit TurboTax recently posted a related question on their site with additional details on this topic. Also, note that some states offer commuting tax deductions so be sure to check your state tax code to see if any expense you have can be deducted.

Car Donation Could Mean Deduction

If you’re thinking of donating a car, charitable donations always feel good and may also be eligible for a tax deduction. The IRS has created a great brochure that takes you step-by-step through the process. There are many organizations that benefit children, veterans or other great causes who accept cars as a donation. Whether you have donated or plan to, this donor’s guide is a great form of reference.

Medical, Moving and Charitable Mileage – Oh my!

There are a few more auto-related tax deductions that you might not be aware of. If you are using your car to get to and from medical treatments or to volunteer your time at a 501(C)(3) non-profit organization, there are certain situations where you could deduct the mileage from your taxes. Also, if you have moved for a job, some expenses may qualify. Be sure to check out this information from Intuit TurboTax to see if you qualify for these deductions.

Good luck driving down your taxes this year!

 

Disclaimer: I am not a lawyer or a tax attorney. This is meant to be general in nature and you should thoroughly research the information provided by the IRS or consult a tax attorney before making these deductions or filing your taxes.

My goal is to make the lives of our GasBuddies easier with tips, information and advice related to traveling and saving money. I spend many hours driving around in my Toyota 4Runner with my two young kids and big yellow dog. I write for GasBuddy but I carry these other titles as well: wife, mom, marketing maniac, dog owner, commuter, carpool driver, soccer and basketball coach, family CFO, chef, runner, yogi, skier, lover of books, sports fan, semi-retired golfer, knitting beginner, want-to-be painter and vacation planner. Thanks for reading and joining me on the road ahead!