american citizens could benefit from a healthy tax savings if they took advantage of the special rules for commercial vehicles. Taxpayers should be aware of the nuances of mileage deductions, as well as vehicle depreciation.
Operating expenses for cars, SUVs and pickup trucks used for business purposes are usually tax deductible. These expenses can be calculated using the Internal Revenue Service (IRS) standard mileage rate, which was 62.5 cents per mile for the last half of 2022.
Taxpayers can also add actual expenses such as gas, oil and repairs for the business use of their vehicles. These vehicles could be owned by a company or an employee, but the method of claiming the deduction is different in these two cases.
How much of a new car can you write off in taxes?
Congress enacted a law a few years ago to prevent taxpayers from subsidizing extravagant vehicles used by businesses. This means that for new or used vehicles placed in commercial use in 2022, there is a maximum first-year depreciation write-off of $11,200, as well as up to an additional allowance of $8,000.
Meanwhile, for SUV owners with a laden vehicle weight between 6,000 and 14,000 pounds, 100 percent of the total cost can be spent.
It should be noted that taxpayers planning to take a vehicle deduction should make sure they keep a record of their business miles and any additional expenses they wish to write off.
The Internal Revenue Service announced last June a c for the last six months of 2022.
“The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices,” said IRS Commissioner. Chuck Rettig.
“We are aware that a number of unusual factors related to fuel costs have come into play, and we are taking this special step to help taxpayers, businesses and others who use this levy.”
