Contrary to popular belief, the IRS does not limit business owners to claiming deductions on only one business vehicle.
You might maximize tax benefits by using multiple vehicles for business purposes.
This is particularly true when
- you use the vehicles predominantly (more than 50 percent) for business,
- you drive more business miles than your spouse, and
- the vehicles have closely aligned adjusted bases.
The allowability of multiple vehicle use is made clear in both IRS Publication 463 and IRS Form 4562.
Several tax court rulings have upheld your right to claim business deductions on multiple vehicles within the same tax year.
Here’s an example of how you might benefit: An attorney, Mel, utilized his and his wife’s vehicles for business purposes. By strategically alternating between using the two cars for business trips, he increased his deductions by up to $32,460 without spending more money or driving more miles.
Seven “Rules of Thumb” to Consider When Writing Off Auto Expenses
As a Certified Main Street Tax Advisor, my mentor Mark Kohler, CPA, teaches 7 rules of thumb when considering when to take the mileage deduction vs. actual expenses. He explains it really well in his blog post here.
He also has a great video on how to maximize your auto tax deductions below.
What You Need to Know Before Writing Off Your Car
If you want me to calculate how this might benefit you, book a call and let's talk!