April is tax season, and for car owners, there are benefits when filing your taxes. This is especially true if you use your vehicle for business purposes. Our Toyota financial center at Heritage Toyota Catonsville is here to help explain how it works.
Mileage Deductions
You can write off a portion of your travel expenses using the standard mileage rate. As of 2022, you can write off 58.5 cents for every mile driven for business use.
Keep in mind driving to and from work doesn’t qualify as business use. Other business-related expenses, such as parking fees, don’t qualify for deductions either.
Actual Expense Deductions
Alternatively, you can opt for an actual expense deduction. Under this option, you can deduct vehicle-related expenses like insurance, depreciation, and maintenance. As with the standard mileage rate, you can only deduct based on the percentage used for business.
Section 179 Deduction
IRS code Section 179 allows business owners to claim deductions for business purchases, vehicles included. Once again, you can only deduct based on business use. For instance, if you buy a Toyota vehicle for $40,000, and you drive it for business 75% of the time, then you can claim up to a $30,000 deduction.
There are rules, though, for vehicles to be eligible. You must use the car at least 50% of the time for business, and its weight cannot exceed 6,000 pounds.
Get Car Finance Assistance at Our Baltimore, MD Dealership
The aforementioned advice is for informational purposes only; always consult with a certified accountant. The Toyota finance team at Heritage Toyota Catonsville can assist with financing or leasing a new or pre-owned Toyota model. Visit us today to start your buying journey!
