Taking care of your car can be a challenge. You want to keep it in the best shape possible so that you can save money while still being able to use the car for all your daily needs. But the cost of most repairs can put a huge dent into the amount of money that you have left over to pay for your other bills. For those car owners who take good care of their cars and would like to save some money during tax season, the professionals at TH Tax Services can help you learn how to claim the right deductions on your tax return. There are many great deductions and credits that are available for your automobile expenses so you can take great care of your vehicle while also saving some money.
Mileage Rate
When it comes to your car expenses, you may be able to deduct the amount of gas that you used in order to travel around for your job. Keep in mind that you will not be able to deduct any miles that you traveled for personal reasons. The standard option is the easiest and this is the one that works the best for most people. With this option, you will just figure out how many miles you traveled for that year and then deduct 57.5 cents for each mile. This keeps things simple and requires a lot less paperwork.
The standard deduction is great, but if you spent a lot of money on repairs, fees for registration, or for other things in relations to the vehicle, you will not be able to claim them when you claim the standard deduction. If you spent a lot of extra money on the car, make sure that you use the actual expense option rather than the standard deduction. This one will require a lot more paperwork, but can help you to get more back at the end of the year.
Actual Out of Pocket Expenses
The actual expense deduction is going to take a lot more work compared to the standard deduction but it can help you get more money back at the end of the year because it takes the actual amount that you spent on the vehicle rather than going by the price per mile option. Some of the things that you can choose to deduct with this option include:
Before claiming anything with this option, you need to take the time to figure out what percentage of the time you use the vehicle for business use and what percentage is for personal use. It is not likely that your vehicle is going to be 100 percent used for business use so you will need to divide up the amount for each and then not claim the amount for personal use.
Many individuals choose to try out both methods to see which one is going to give them the biggest return, while others will just choose the standard deduction because it is a lot easier. Either way, keep good track of how much you use the vehicle and what kinds of expenses you incur to make it easier to keep track of during tax season. If you have any questions about which automobile expenses you are able to deduct or which of these plans may be the best for you, make sure to contact our professionals at TH Tax Services to get it all taken care of for you.
Getting the Deduction
Now that you know what kinds of things that you can deduct for your automobile expenses when it is tax season, you may want to learn how to claim these deductions. This is a pretty easy step on your tax return as there are sections that ask the questions to help you get the most back. You must make sure that the expenses you are deducting are qualified and that you have kept all the right receipts to prove that you actually qualify for the deduction.
Keep in mind when you are claiming one of the deductions above, that you will need to pick one for the year and you are not able to change it for that year, even on an amended return. You can change it for the following year if needed. Many people will choose the standard deduction for their first year and then switch to the actual deduction later on when their expenses get a little higher. You can choose either one, just make sure that you have the right paperwork in place before claiming them.
If you are unsure about which deductions you should qualify or the amount that you should claim, it is best to bring in the professionals such as those from TH Tax Services. We can help you to get the most out of your car deductions so you can get more money in your pockets to spend on other important things in life.
Figuring out which automobile expenses you can deduct from your taxes can be a challenge. If you need help learning which expenses apply to you, make sure to contact Tanya Hernandez from TH Tax Services in Panorama City, CA. Our professionals know how to compute automobile expense deductions so you are able to get your biggest refund and more money back for your car care needs. Contact us today.
