Abstract: It’s not just businesses that can deduct
vehicle-related expenses on their tax returns. Individuals also may be able to
deduct them in certain circumstances. Under current law, the deduction is less
than it was years ago, although due to the high price of gas, the IRS has
raised the amount per mile that is deductible.
It’s
not just businesses that can deduct vehicle-related expenses on their tax
returns. Individuals also may be able to deduct them in certain circumstances, if
they have a business-related purpose. However, under
current law, non-military members can no longer deduct expenses for job-related
moves and employees can no longer deduct business driving expenses for which they’re
not reimbursed. And, due to the high price of gas, the IRS has increased the
amount per mile that is deductible for eligible business driving.
Rather
than keeping track of your actual vehicle expenses, you can use a standard
mileage rate to compute your deductions. Here’s a list of the rates for different
types of 2023 driving:
· Business.
65.5 cents per mile (up from 62.5 cents for July 1 to December 31, 2022).
· Medical. 22 cents (unchanged
from the second half of 2022).
If
you’re self-employed, business mileage costs can be deducted from
self-employment income. For all types of eligible driving, you may also be able
to deduct parking fees and tolls. Keep in mind that the burden of proving
mileage that you claim is on you. You’ll need to keep contemporaneous records
of trips you want to deduct, the number of miles driven and the business purpose
of each trip.
Get help
Do
you have questions about deducting vehicle-related expenses? Contact us. We can
help you with your tax planning.
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