Forgotten Tax Write-Offs: Don’t Miss Out on Money You Could Be Saving with Your New Work Truck
Buying a new truck has plenty of perks, but one of them is not taken advantage of nearly enough. If you use your truck for work purposes—and there is a wide range of what is considered a “work purpose”—you might be able to save a lot of money by way of tax write-offs.
The holiday season is the best time to purchase a new work truck. The savvy car-buyer knows that the end of year produces some pretty impressive deals, but this same buyer also knows that going for a new work truck has a hidden benefit as well—tax write-offs!
Why don’t more people write-off their work trucks? Confusion, most likely. Not so much in the process of making deductions, but confusion in what can be deducted and how to go about writing things off. Fortunately, the process of deducting your yearly taxes for mileage used is not difficult at all, just as long as you know what can be counted and where to file. At Liberty Buick GMC we are always looking out for our customers, even their taxes! So we did a little digging and have come up with a few key pieces of information for anyone looking to save a bit of cash come next tax season.
Let’s take a look at a few of the most common purposes for using a truck that can generate you some substantial financial returns.
Though there is no compensation for driving from your home to your place of work, if you use your truck to drive from one job site to another, meet with clients, or even drive clients around, you are eligible for a write-off.
In order to deduct for business purposes, document your mileage on Schedule C if you are self-employed, and on Schedule F if you are a farmer—or, if you’re an employee, you can document as an unreimbursed business expense on Form 2106.
According to the IRS, driving to get medical attention for you or your dependents, as long as the drive is “primarily for, and essential to, medical care,” allows for a deduction that can be made on Schedule A of your tax form as part of your itemized medical expenses.
This is one deduction most people forget about or simply choose to ignore. But it’s easy to document, so why not?
If you find yourself providing any type of service to a charitable organization, such as driving to perform volunteer work for a church, helping out with a charity, or volunteering at a local hospital, you can deduct driving expenses.
Simply document the deduction on Schedule A on your tax form as part of your charitable donations.
Most people do not take advantage of work-truck write-offs because they don’t want to bother with the paperwork. But, after looking into the actual process of making deductions, there are only two options: use your actual expenses, or use a standard mileage rate.
If you want to deduct according to your actual expenses made, the following are what should be considered:
- Parking fees and tolls
- Vehicle loan interest
- Vehicle registration fees
- Personal property tax on the vehicle
- Lease and rental expenses
- Repairs—oil changes, tires, other routine maintenance
If you would rather use a simpler method, consider documenting according to the standard mileage rate. This rate varies depending on the year and reason(s) for driving your work truck, but you can get a significant amount of money back using this method.
The process is simple: take the number of miles you want to use as a write-off and multiply it by the applicable rate. Here are the rates for 2019:
- Business Purposes=58 cents per mile.
- Medical Purposes=20 cents per mile.
- Charitable Services=14 cents per mile.
In addition to deducting for mileage, you can also deduct for parking fees and tolls under this option.
If you have a truck and you use it for any or all of the purposes listed above, definitely consider your deductions! It may not seem to be much in terms of savings at first, but it adds up quickly and can be done every year.