Do you use your personal vehicle to run errands for your business or to visit clients? If so, did you know that using your car for business could have some tax benefits?
Why Might You Use a Personal Car for Business?
Maybe you’ve never considered driving your personal car for business use. Maybe you thought you had to buy a separate vehicle to use for your company. If you are using a car for such business purposes as buying supplies, visiting clients or attending trade shows, your personal car should suffice.
Can You Deduct Car Expenses When Using a Car for Business?
Because you can only deduct expenses related to the operation of the vehicle for business use and not personal, it can get a little tricky. That’s why there are two ways you can deduct expenses. The first is by using the standard mileage rate set by the IRS.
1. Deductible Expenses
Things like car maintenance and repairs, oil changes, gas, tires, licenses, registration and depreciation are all deductible expenses. You can also deduct parking fees and tolls, even if you use the standard mileage rate.
2. Nondeductible Expenses
Any expenses incurred while using the vehicle for personal errands or trips aren’t deductible. So, if you take a road trip for fun, you can’t write off the gas for the trip. Also, you can’t deduct your miles from home to work, as that’s considered a personal expense.