How to Use Your Car as a Tax Write Off
February 11th, 2009
Most people don´t know that they can use their cars as a means to save valuable tax money on their income. Even if you are using your car for personal purposes, if you can prove and show that it has been used by your company for business purposes, and all the expenses on the car, like fuel expenses, maintenance expenses, etc., as expenses of the company, then you will surely get deductions on the taxes which you earlier would have to pay completely.
Often times people do not even consider the fact that they use their car for business. Do you use your car to pick up mail for the business? Run an occasional errand? How about driving somewhere while still on the clock? These are all examples of the many different types of uses that classify your car as a business expense and, thus, allow you to be eligible for a sizeable tax deduction.
You can use your car in your business and show operational costs as expenses of the company. The cost of operating the car can be shown as the amount the company spends on transportation.
Like you can show that your car is being used for transporting goods from one place to another, or its being used to pick up and drop the company’s employees, or other similar purposes.
And, if you own more than one car, then this technique is surely going to benefit you a lot, as then you can show that all your cars are being used for company’s work, and you will save a greater value of tax.
Often you are not even fooling anybody as you need to use the car a lot more when you are working than when you are not. So using the car to show travel expenses is a clever and clean idea indeed.
If you are not currently using your car for company business then consider doing so, even a minimal use can lead to a big tax deduction. And remember, keep any receipts as you will need these in the case of an audit. Your business will most likely also want records of this sort of information.
Hopefully now you can see how the way that you currently drive your car can be interpreted as a business expense and leave you eligible for a very sizeable tax deduction. Be sure to file with tax deductions in mind, you’ll be surprised just how many things can save you big money.