🚗Choose between the mileage and actual methods for your auto deduction based on your business usage.
💡The actual method requires detailed record-keeping of expenses like gas, repairs, and insurance.
🔍Mileage method is simpler, and the current rate is 65.5 cents per mile.
💰Actual method may result in a higher deduction if you have a high percentage of business usage.
📝Keep track of your mileage and expenses for accurate deductions and to support your claims.
Can I switch between mileage and actual methods?
—Once you choose a method, you generally cannot switch unless you have a valid reason.
How do I determine the business usage percentage?
—Calculate the percentage of miles driven for business purposes compared to total miles driven in a year.
Are there any limits on business deductions for luxury vehicles?
—Yes, luxury auto depreciation limits may apply, reducing your deduction.
Can I deduct the cost of personal vehicles used for business?
—No, only vehicles owned or leased by your business are eligible for deductions.
What records do I need to support my auto deductions?
—Keep a mileage log, receipts for expenses, and a record of business activities that required the use of the vehicle.
00:00Introduction and importance of auto deductions for small businesses.
06:40Difference between mileage and actual methods for auto deductions.
09:23Considerations for choosing the mileage or actual method.
15:30Overview of key insights on mileage and actual methods.
22:15Frequently asked questions about auto deductions.
26:45Explanation of luxury auto depreciation limits.
30:10Important reminders and best practices for accurate auto deductions.
