Deductions and Write-Offs
The most frequently asked tax questions related to Deductions and Write-Offs
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Answer Tax QuestionsMileage or actual expense - Annual election
Asked Monday, November 28, 2011 by an anonymous user
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.
Bonus depreciation - vehicles
Asked Monday, November 28, 2011 by an anonymous user
Bonus first year depreciation for vehicles placed in service in the current year that were new and used over 50% for business is $11,160 for auto's and $11,360 for light trucks and vans.
SUV - favorable tax deductions
Asked Monday, November 28, 2011 by an anonymous user
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 user
Vehicles such as vans, SUVs, trucks that weigh more than 6,000 pounds are not subject to depreciation dollar deduction limitations.
Electric vehicles - credit
Asked Monday, November 28, 2011 by an anonymous user
Yes. 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 user
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 user
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.
Taxi - standard mileage rate
Asked Monday, November 28, 2011 by an anonymous user
As of 12/31/10 the ban on using the standard mileage rate on auto's used for hire such as a taxi was lifted. The standard mileage allowance for business use of a auto in 2013 is 56.5 cents per mile for business miles driven.
Traffic tickets
Asked Monday, November 28, 2011 by an anonymous user
No. Fines for traffic violations, parking violations are not deductible.
