You probably take for granted just how much time you spend in your car every week. What you do notice is the cost you incur for fuel, general maintenance and ill-timed auto repairs. If you’re looking for a way to save when you hit the road this summer, you can’t afford to overlook some vehicle-related tax deductions.
There are plenty of driving activities which will actually net you some helpful tax savings when it comes time to file next year. Starting as early as the summer months can ensure you have something to show for your various auto excursions. Consider what deductions you can take on your car, and how to simultaneously avoid having a collision with the IRS over some basic filing mistakes.
First, the good stuff: Philanthropy can benefit your community as well as your taxes. Your expenses for driving to volunteer activities are tax-deductible. This includes money you spend on fuel and tolls; even parking at your charity gig is able to be written off.
In the event that you pull up stakes to take a new job, you can deduct some of the moving costs – including the actual distance that you have to travel to make the transition. You have to be sure that you’re at least 50 miles away from your previous workplace in order to take this deduction. The really good news? You can take a tax deduction even if you’re using your car on your quest for a new position.
If you find yourself in a fender-bender or worse, there may be a silver lining in your tax return. When your car loses value as a result of the damage, this may be deductible. Also, should you have a crash where the other liable motorist’s insurance doesn’t completely cover your damages, you can deduct the cost difference.
You might have a little extra income from property you rent, which you no doubt understand is taxable. But did you know that you can actually write off expenses when you’re going back and forth to this location? As long as you’re using your car to visit the rental for landlord duties like maintenance, you’re able to take the deduction.
While you should definitely take advantage of every vehicle tax break you can get, proceed with caution. First, any expense you want to write off should be accompanied by a receipt. A good rule of thumb: if you don’t have valid documentation, don’t take the deduction. Any random audit on your return will result in trouble if you don’t have the proper receipts in hand.
It’s easy to make filing mistakes in your tax break endeavors. If you have any question about whether or not you’re on the right track, consult with a tax professional first. And if you’re face with an IRS issue over tax breaks you’ve taken in error, don’t hesitate to contact a licensed tax professional. The last thing you want is the IRS in your blind spot.