Auto & Truck Expenses
The most frequently asked tax questions related to Auto & Truck Expenses
SUV - favorable tax deductions
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
Yes. The full cost of a heavy SUV (sport utility vehicle) can be deducted if not pre owned and placed in service new and used 100% for business. If the weight is between 6000 and 14000 pounds then there is a $25,000 limit on first year expensing of the vehicle.
Car or van depreciation - differences
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
Vehicles such as vans, SUVs, trucks that weigh more than 6,000 pounds are not subject to depreciation dollar deduction limitations.
Electric vehicle - benefits
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
There is a credit for plug in electric vehicles. In the current year the credit is up to $7,500 regardless of the vehicles weight.
What documentation is needed to deduct auto expenses?
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
You should maintain a log or diary of your auto expenses. If you use the actual expense method you should save the actual receipts for gas, oil, insurance, repairs, licenses and taxes. If you use the mileage deduction method you need to maintain a log or diary which lists the date, destination, business purpose, mileage driven (odometer start/end) type and amount of other expenses incurred. Currently there are phone applications for mileage documentation.
Auto lease payments
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
Yes. If you use a car entirely for business the cost of leasing is deductible. You cannot depreciate a car you lease. You can choose to deduct the standard mileage rate in lieu of actual expenses including lease payments.
Traffic tickets
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
No. Fines for traffic violations, parking violations are not deductible.
Auto expenses
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
The actual expense method allows a individual to deduct all out of pocket costs for operating the auto plus depreciation if you own the auto.
Some of those costs are Gas, insurance, repairs & maintenance garage rent, lease fees, licenses, loan interest, oil changes, parking fees, tires, tolls, towing and registration fees.
Some of those costs are Gas, insurance, repairs & maintenance garage rent, lease fees, licenses, loan interest, oil changes, parking fees, tires, tolls, towing and registration fees.
Mileage or actual expense - Annual election
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
The choice of the actual expense method on the first year will bar the use of the standard mileage method ion subsequent years.
If you use the standard mileage method in the first year then you can use the actual expense method in future years.
If you use the standard mileage method in the first year then you can use the actual expense method in future years.
Temporary place of work
Asked Monday, November 14, 2011 by an anonymous userCPA Answer:
The IRS considers a work location temporary is one at which the employment is realistically expected to last and actually does last for a period of 1 year or less. A worker can deduct their unreimbursed costs of driving to temporary locations.