Posted by Peter J. Marchiano, Jr., CPA

Maximize Your Vehicle Deductions at Tax Time

Maximize Your Vehicle Deductions at Tax Time

Standard or Actual Expenses?

Taxpayers who want to understand how to take advantage of vehicle deductions in order to lower their tax bill have a number of options. The IRS allows multiple methods for figuring car and truck expenses, but sometimes it's tricky deciding which method to choose for your particular situation.


Know the Rules of the Road

In general, vehicle deductions can either be taken as "actual expenses," where you have to calculate all the individual vehicle-related costs yourself or as a "standard deduction" method, in which you simply take a per-mile dollar amount based on your qualified driving for the year. For Camp Hill PA residents, here are the basic facts about maximizing car and truck deductions at tax time:

-It's best to run the numbers for both the "actual expense" method and the standard mileage deduction so you can find out which one benefits you most. Keep in mind that there is a substantial amount of bookkeeping involved in the "actual expense" method, which is why so many taxpayers opt for the simpler standard method.

-The IRS basically allows four types of vehicle costs to be deducted: medical, work, charitable and moving. Each category has its own rules and limits, but the essential point is that mileage is deductible if it is done strictly for your job, to get to medical treatment, for a charitable purpose, or to relocate to a new job.

-Medical mileage deductions must be specifically for a medical reason for yourself or a dependent or spouse.

-Job relocation (moving) must be for a new job or job assignment that lasts for a minimum of 39 weeks and that is more than 50 miles farther from your new home than your old job location was from your old home.

-Charitable mileage deductions can only be taken if your driving is done solely for the benefit of a charitable organization.

-Work-related deductions can only be taken for trips between job locations, not for miles between your home and your office. The IRS calls those trips "commutes," and they are not ever deductible. However, if you maintain an office in your home, you can deduct miles from your home to visit a client or to perform a job-related task such as a conference.

-For 2017, taxpayers can either deduct actual mileage expenses in each of those four categories, or they can simply tally up the total number of qualified miles and multiply by the factor for that category in 2017.


-For example, the 2017 rates for moving or medical-related mileage is 17 cents per mile. For business miles, the rate is 53.5 cents per mile, and for charitable miles, the rate is 14 cents per mile.


Get the Most Out of Your Miles

To learn more about maximizing your vehicle deductions, and to discover other ways to minimize your tax bill with Tax Resolutions Specialist. The firm has vast experience assisting individuals and businesses with a wide range of taxation issues. 


Peter J. Marchiano, Jr., CPA
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