You can make car expenses work for you. For many Americans, work and personal time have become increasingly intertwined over the years. While this certainly has its drawbacks, it can be a boon come tax time for those who must drive as part of their work. Knowing all of the auto-related deductions you’re entitled to can ensure that your automobile is working as hard for you as you are for your paycheck.
The first thing an auto-using taxpayer needs to do is determine which of the two types of write-offs to use, said Julian Block, a Larchmont, New York–based tax attorney who is the author of "Tax Deductible Travel and Moving Expenses: How to Take Advantage of Every Tax Break the Law Allows." One type entails personal use of your vehicle -- using travel deductions -- and the other includes business use. People often do a little of both. "If you use your car exclusively in your business, you can deduct car expenses," said IRS representative Sara Eguren. If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage."
First up: If you have a full-time job, but occasionally use your personal auto for professional duties, you're probably qualified for write-offs. “If you use your car for anything work-related, other than simply commuting from home to work, there are deductions you can take," said Andrew Schrage, co-owner of the Chicago-based personal-finance site MoneyCrashers.com. "Don’t miss out."
"If you use your car for anything work-related, other than simply commuting from home to work, there are deductions you can take. Don’t miss out," says Andrew Schrage, co-owner of MoneyCrashers.com.