The use of any vehicle for business purposes presents some of the most tricky tax issues a small business or home based business owner faces. It also presents one of the biggest opportunities for tax savings you will encounter.
First, there are multiple items for you to consider:
- Is the vehicle used in any part for personal use?
- Is it used as an employee of a company you work as well as a business you own?
- Have you maintained the logs of mileage that demonstrate how much the vehicle was used in the business and elsewhere?
- Which expenses are covered under the mileage deduction, and which can be taken in addition to the mileage deduction?
- Are there special considerations for the type(s) of vehicle(s) you use, i.e. special fuels, SUVs, vehicle weight, etc.
- Do you own a “fleet” of vehicles used in your business?
And, you need records for:
- Mileage
- Maintenance and repairs
- Taxes, title and license expenses in any year
- Purchase and sale documentation
Including records showing:
Whether the vehicle is owned or leased, sales, use and excise taxes paid, whether there are any liens and loans on the vehicle(s), and any other expenses you may wish to deduct.
As you navigate this maze, you may need help. A good internal accountant or recordkeeper earns his or her keep when it comes to tracking the important information you need relating to vehicle deductions. A tax advisor who is an expert in vehicle expenses can save you a world of heartache or heartburn, as the case may be.
And to get everything organized, filed and settled, TurboTax Online is your resource to put everything together and to rest when you are ready to file your taxes for the year. Don’t wait! Get what you need ready now before the tax crunch looms like a dark cloud in April!
