Are you financing a Jeep® vehicle? With Tax Day just around the corner, it’s nice to know that Jeep financing can provide you with nice some tax advantages. Heritage Chrysler Dodge Jeep RAM Parkville goes over the benefits you may qualify for.
Deducting Business Expenses
The first thing to know about tax benefits when financing is that your vehicle needs to be used for business purposes. It doesn’t have to be a full-time business car, however — if you use it both for personal and business reasons, you can still deduct some of the expenses. There are two ways to do this, either with a standard mile deduction or actual expense deductions.
With the standard mileage deduction, you get to write off the miles you drove for your business on your federal taxes. For 2023, this standard mileage rate was 65.5 cents per mile driven. The actual expenses deduction involves calculating the sum of all vehicle expenses.
In addition to car payments, this can include money spent on things like maintenance, insurance, and fuel. Once everything is added up, you will multiply this by the sum by the portion of the vehicle you used for business.
Depreciation Deduction
Another great tax benefit concerns the car’s depreciation, which is its loss in value. In order to deduct this, you need to use the actual expense deduction. You will then have to calculate how much your vehicle depreciated over the previous year, and you can do that using the modified accelerated cost recovery system (MACRS). It is important to note that the depreciation deduction can vary from year to year.
Get Your Jeep® Financing Questions Answered in Parkville, MD
Any questions about financing and taxes? Get in touch with Heritage Chrysler Dodge Jeep RAM Parkville. We can also let you know about current Jeep financing offers if you are looking for a new vehicle.
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