Cars in general are one of the most pricey assets t acquire, in terms of both initial investment we make in them plus the price of it’s maintenance. The good thing is there are valid ways in order to compensate for these by doing tax deductions. Anyone can qualify for these options.
Hybrid cars bought before 2011 could get tax credit that directly reduce the amount of your tax. If you bought a hybrid car for your company fleet then you can get this exemption too. Yeah, it’s applicable to businesses as well.
Transform Your Car
Hear out a mechanic’s opinion first whether the car is worth being converted because there are cases where it’s unnecessary to do so, say for an old car the conversion may not be a good idea since you don’t expect it to last much longer.
Subtract Company Usage
If you are a freelancer and otherwise self-employed individual, you may deduct the costs of business usage, even if it’s on your personal vehicle. This is the best method for those who work under a sole proprietorship rather than as a legal business structure such as a corporation. The key here is to separate business use from personal use, which could be accomplished by applying some kind of tracking mechanism like CarCheckup, a little tool which connects into your vehicle for company trips then posts mileage information and other information to your computer when you plug it in with USB
Small Company Fleet Deductions
If you’re running a small business, a vehicle used exclusively for business can contribute to your annual tax deductions as part of your operating expenses. While the cost of overhauling a business vehicle doesn’t qualify as a deduction (overhauling needs to be included in capitalization expense and calculated in the depreciation cost), the cost of repair can be deducted. Keep clear records of repairs, because just claiming an approximated cost won’t go more than well with the IRS.
If you plan to rent a car, make sure you check the gas before you leave and return it with the same amount.
Unless you’re using your motor vehicle solely for your business, you can’t deduct the full cost of buying, maintaining and repairing it. You can and should, however, deduct what you can. The key, as with almost any issue to do with the IRS, is having clear records to support your claims. (Besides creating ongoing income and capital appreciation, real estate provides deductions that can reduce the income tax on your profits.