With tax season upon us, many car owners wonder what, if any, car expenses can be claimed as a tax deduction. As a general rule, expenses associated with your average run of the mill car use are not tax deductible. There are however some situations where certain car expenses can be used to lower your tax bill. The following information from your Greenville Honda team should be used as a guideline only; always consult a tax professional to ensure deductions fall within IRS guidelines.
When can car expenses be claimed as a deduction?
Greenville Honda dealers understand that in an ideal world, all car expenses would qualify as tax deductions. Unfortunately that is not the case. In order to claim expenses associated with car ownership as a deduction they must have resulted from the use of your vehicle for one of the following reasons:
Business use
Medical purposes
Moving
Charitable use
Qualifying expenses resulting from one or more of the above situations may be used to lower your tax bill.
Which expenses qualify?
Once you have determined the use of your vehicle qualifies expenses as tax deductions, the following expenses may be claimed on your tax return:
Registration fees
Insurance
Fuel
Routine maintenance
Repairs
Toll and parking expenses
Loan interest (only self-employed individuals may claim)
Honda in Greenville encourages drivers who intend on claiming expenses as a deduction to keep accurate and detailed records of all expenses. This will provide the documentation necessary should deductions raise questions with the IRS.