Vehicle expenses paid exclusively for your business activity can be
fully deductible. Many people do not take full advantage of deductions
for their vehicles, and many times it=92s because they don=92t know what
they are allowed to deduct. It depends on whether you will be using
the standard mileage deduction or actual expense method. Using the
actual method might be more beneficial if your vehicle incurred a lot
of expenses during the year.
Usually the largest vehicle expense that you can deduct is
depreciation, which allows you to deduct the value of your vehicle
over a period of 5 years. Many times, this is the factor that
determines which expense method will be used.
Other deductible costs include car insurance, DMV registration fees,
tolls, parking, gas, oil changes, tune-ups, tires, maintenance, etc=85
When deducting actual vehicle expenses, it is very im****tant to keep a
track of costs and receipts. If you do not use the vehicle solely for
rental activity, then you should keep a record of mileage traveled for
your business, so you can deduct a percentage of the vehicle=92s actual
expenses.
Whether using the standard mileage or actual expense deduction, be
sure to record all expenses related to your rental activity. You
usually won=92t know which deduction method to use, so it=92s best to just
keep a journal of all vehicle activities.
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