How many of us use our cars for work and for personal use? Yes. A lot of us do. If you use your car for work and are self-employed or do not get reimbursed by an employer, you can write off car expenses. Here’s how.
Let’s suppose you keep excellent records and know you spent $10,000 on your car this past year. That includes the loan payments, insurance, gasoline, maintenance and repairs. You also document that you use the car 75% for business use. Therefore, you can claim $7,500 as a deduction on your tax return. You need excellent records showing how much you spent and what you did with the car. A daily journal will help you prove business use.
A professional tax preparer can help you determine what works best for you. Maybe you could benefit from a percentage of actual costs. A tax preparer can help you decide which benefits you more. For help with your tax returns or finances in general, contact Dave Fechter, CPA at (916) 984-2081.