If you use your car for business travel, the expenses can be tax deductible.
Even though your daily commute to and from work doesn’t actually count (wouldn’t it be awesome if it did?), the other expenses incurred can add up resulting in a sizable deduction at the end of the year.
There are two ways to use this kind of deduction; either by taking the standard mileage deduction or by deducting the actual expenses. Keep excellent records so you can determine which method will result in the biggest deduction.
Here are some of the things that you can deduct:
- Lease Payments
- Garage Rent
- Parking Fees
- Registration Fees
This can end up being one your biggest deductions at the end of the year, particularly if you work for yourself. Again, meticulous record-keeping is key in benefitting from this deduction. But if going through receipts and manually calculating compiled expenses at the end of the year sounds just as fun as getting a root canal, have no fear millennial, there's an app for that.
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Jody Grunden is a nice guy who likes hockey, golf, and his family. He also meets with businesses on a weekly basis as a Founder and Managing Partner over at Summit CPA Group, a Virtual CFO firm that helps growing companies manage (and improve) their finances.