Deducting Auto Expenses & Luxury Auto Limits |
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When you use a vehicle for business purposes, you can deduct the business portion of the operating expenses on your business. If you use the car for both business and personal purposes, you may deduct only the cost of its business use. You can generally determine the expense for the business use of your car in one of two ways, the standard mileage rate method or the actual expense method.
Tax Benefits for Fuel-Efficient Vehicles |
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With gas prices going through the roof maybe now is the time to take advantage of the energy tax incentives available for the purchase of hybrid vehicles.
Will the Interest on Your Vehicle Loan be Deductible? |
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The answer to that question depends upon whether or not the vehicle is being used for business purposes, where the expenses are being deducted, and the type of loan. If the loan is a consumer loan secured by the vehicle, then the following rules would apply.
Luxury Car Rules May Limit Vehicle Write-Offs |
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Many of today’s sport utility vehicles that are more than 6,000 pounds in gross weight are not subject to the luxury auto rules. Owners using these vehicles for business historically have been able to utilize both the Sec 179 expense deduction and bonus depreciation, and have not had their depreciation deduction limited by annual caps since the Sec 179 expense limit is in excess of $100,000 and allows taxpayers to write off the entire business portion of an SUV’s cost in the first year.
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