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Frequently Asked Questions about Auto Expense Deductions

Deducting Use of Car for Business Purposes

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Whether you have a car that has been purchased by your business, or you are using your personal vehicle for business purposes, you need to know which expenses are deductible. You also need to know how to keep records so your deductions have a better chance of being approved by the IRS, and how car/truck expenses work in a home based business.

1. What Car/Truck Expenses are Deductible for a Business?

This article explains the basics of deducting car/truck expenses for self-employed business owners.

2. Can I Deduct Expenses for Commuting Back and Forth to My Business?

You cannot deduct expenses for commuting back and forth from your home to your business location. Learn more about this subject, including some common questions about commuting-related expenses.

3. How Do I Calculate Mileage Expenses - Standard Allowance or Actual Expenses?

The question of how to calculate mileage using the IRS standard mileage deduction or to record actual expenses for business use of your car/truck can only be decided on a case-by-case basis. This article will also show you how to calculate mileage using both methods. Also, be aware that if you want to be able to use the standard deduction in future years, you must use it the first year of your business.

4. What Records Do I Need to Keep for Car/Truck Expenses?

The IRS watches travel, entertainment, and car/truck expenses very closely to make sure they are really business-related and not for personal use. Learn how to keep good records on these expenses to avoid problems at audit time.

5. What Car/Truck Expenses are Deductible in a Home Based Business?

Travel by car/truck to and from your home business is deductible, under most circumstances. Learn more about this deduction and how to record it.

6. Should I Lease or Buy a Car for My Business Use?

This is a complicated question, because there are many variables involved, including length of lease, miles driven, sales taxes, and depreciation. Read more about the factors in a car lease to see if this is the best for you. Of course, you should talk to your tax adviser before you make any decisions.

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