Cars are one of the single most expensive things to own, both in terms of initial investment and ongoing costs of maintenance, insurance, and fuel. Luckily, there are plenty of car-related deductions and credits that you can take advantage of when tax time rolls around. It might not be Tax Day yet, but it’s never a bad idea to start planning ahead of time! Remember these three important tax credit and deductions when tax season arrives.
- Deduct business usage. If you’re a freelancer or small business owner, you can deduct the costs of maintaining and repairing a car used exclusively for business from your taxable income. If you have a vehicle that functions as both a personal and business vehicle, you may only deduct 54.5 cents per mile driven for business purposes.
- Take advantage of hybrid car credits. Did you buy a Tesla or other hybrid vehicle this year? If so, you may be eligible for a valuable tax credit worth up to $7,500 depending on the make and model of your vehicle. Tax credits are more valuable than deductions because they directly reduce the amount that you in tax liability, so make sure to ask your CPA about taking advantage of this offer.
- Consider donating your vehicle to charity. If you’ve got an old car sitting on your property that you don’t use, you may want to consider donating the vehicle to charity. You may deduct the Kelly Blue Book value of your car from your taxable income as a charitable contribution—just make sure to get an official receipt of transfer from the charity. Of course, you may only take advantage of this deduction if the charity accepts your vehicle; some charities have rules and standards for lemons they will accept, and they may tell you to schedule an appointment for auto salvage pick up in New Jersey
Need cash now without waiting for a refund? Sgt. Scrap’s auto salvage yards in Delaware County offer you top-dollar for your scrap vehicle. To learn more about auto salvage and pickup from Sgt. Scrap, give us a call today at 800-833-6983!