Linda M. Tuttle

The Best Kept Tip to Maximize Your Auto Deductions

Knowing how to maximize your auto deductions for your business can be confusing.  I want to break down some of the rules for you.

Basically, there are two methods when it comes to auto deductions.  You can take the actual method or the standard mileage rate.  There a number of factors that come in to play in determining which method is best for you.

First, in order to use the actual method you do need to use the vehicle for at least 50% business use.  If it is not used at least 50% for business you need to use the standard mileage rate.

To use the actual method you need to be good at keeping your records.  You are going to keep details for the actual amount you spent for gas, repairs, oil changes, maintenance, interest paid, and you can actually take depreciation on the vehicle for the business use percentage.  This is where some big deductions can come in to play, with bonus depreciation and Section 179.  Again, there are rules for you to speak to your tax advisor about, but this can be a great method if you have a higher priced vehicle and you aren't putting a lot of miles on the vehicle.

With the standard mileage rate you are taking the number of miles you drive for business and multiplying it by the standard mileage rate put out for the IRS each year.  For 2024, that number is $.67 per mile.  This can add up in a hurry.  Keep a record of the miles you drive for business.  You can actually deduct the business portion of interest paid on an auto loan even if you use the standard mileage rate also.

A couple items to keep in mind.  You should choose the method and stick with it for the the life of the vehicle.  You should not be flip flopping back and forth between actual and standard method.  Sometimes it is good to keep records for both methods in the first year of the vehicle to determine which is best.  You can have more than one vehicle used for business and use one method for one vehicle and the other method for the other vehicle.

One tip to keep in mind is to get your car serviced at the end of the year so you have something to document the number of miles that were actually on the vehicle at the beginning and end of the year.  This can serve as good evidence to document the number of miles you actually put on your car in a year in a situation where you may be audited.

With every episode of Linda Tuttle Adventuring Accountant TV, I like to equip you with a free resource that goes with the episode for the week.  

This week's episode is all about how owning your business can be a good thing for your life.  I talk about converting personal expenses into business expenses.  I put together a new free resource called 10 Essential Tax-Saving Strategies for Entrepreneurs.  I'm excited to share this with you.

After going through this guide, you will have some real strategies you can implement in your business right away.

You can download the FREE resource by clicking the orange button above.

Linda M. Tuttle


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Linda Tuttle
Linda Tuttle

I hope you found value in this post. I share a new weekly training here on the blog each week for you, with different topics to help you grow your business and maximize your income so you can live the life you want as you prepare for retirement. If there are topics you would like me to cover, let me know.

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