J.K. Lasser's Small Business Taxes 2023

CHAPTER 9Car and Truck Expenses

• Deducting Car and Truck Expenses in General
• Actual Expense Method
• Standard Mileage Allowance
• Leasing a Vehicle for Business
• Arranging Vehicle Ownership
• Nonpersonal Use Vehicles
• Credit for Clean Energy Vehicles
• Dispositions of a Vehicle
• Reimbursement Arrangements
• Recordkeeping for Vehicle Expenses

Alert

At the time this book was published, Congress was considering tax changes that could affect 2022 tax returns and planning for 2023. Check the online Supplement in February 2023 at www.jklasser.com or www.BigIdeasForSmallBusiness.com to see what changes have been enacted and when they become effective.

Americans are highly mobile, with 289.5 million vehicles registered in the U.S. in 2021, according to automotive research agency Hedges & Company. Businesses and self‐employed individuals may write off various costs. Employees who use their personal vehicles for business driving cannot deduct driving costs in 2022. The IRS reported that on 2019 returns (the most recent year for statistics), car and truck expenses was the largest category of deductions on Schedule C (Form 1040) for sole proprietors. There are 2 methods for deducting costs: the actual expense method and the standard mileage allowance. In order to use either method, you must maintain proper records for business driving. There is also a tax credit for purchasing a clean energy vehicle, with new rules introduced by the Inflation Reduction Act of 2022. Some of the rules ...