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Buyers of new cars for businesses can benefit from the special rules on Business Vehicle Tax Deduction. In this article, read and find out more about the tax deduction!
![Business Vehicles [Photo: Insurance Information Institution]](https://s3.us-west-1.amazonaws.com/southarkansassun.com/2023/02/p_businessvehicle_800886338.jpg)
Business Vehicles [Photo: Insurance Information Institution]
An article on MARCA states that the operating expenses of automobiles, SUVs, and pickup trucks used for businesses can generally be a Business Vehicle Tax Deduction. These expenses are calculated using the Internal Revenue Service (IRS)’s standard mileage rate of 62.5 cents per mile. This standard mileage rate comes from the second half of 2022.
In addition, taxpayers can also include actual expenses like gas, vehicle repairs, and oil for business purposes as a Business Vehicle Tax Deduction. These vehicles can either be owned by the company or the employee. However, the process of claiming the tax deductions for both will differ.
READ ALSO: Up To $40,000 Electric Vehicle Tax Credit For New Vehicles— See Who Qualifies
How much can you save from the Business Vehicle Tax Deduction?
According to an article on the TurboTax, the Congress had set a law to prevent taxpayers from subsidizing the expensive vehicles used for business purposes. This means that vehicles that are either new or already owned and used for business in 2022 must have a maximum depreciation. During the first year, the maximum depreciation that can be written off is worth $11,200, along with an additional bonus of up to $8,000. On the contrary, the SUVs with loaded vehicle weights of 6,000 to 14,000 pounds can have their total costs expensed up to 100%.
In June 2022, the IRS announced that there will be an increase in the last half of 2022. Taxpayers are also advised that when claiming a Business Vehicle Tax Deduction, they must keep a record of their business miles and additional expenses that they want to be deducted.
READ ALSO: EV Tax Credit 2023: How Do Electric Vehicles Manufacturer Qualify For Them
