J.K. Lasser's 1001 Deductions and Tax Breaks 2022, 2nd Edition

CHAPTER 7Your Car

1. Business Use of Your Personal Car
2. Employer‐Provided Car
3. Vehicle Registration Fees
4. Car Accidents and Other Car‐Related Problems
5. Donating Your Car
6. Credit for Plug‐In Electric Drive Vehicles
7. Car Insurance Rebates

Americans love their cars. According to Hedges & Company, there were 286.9 million vehicles registered in the United States as of 2020. Cars can be expensive to buy or lease and to operate, especially with today's high fuel prices. But the tax law provides some relief for your car use by way of tax write‐offs.

This chapter explains the tax breaks you can take for your car (the term may also cover light trucks and vans for certain purposes as explained later). Deducting the use of your car for medical‐related travel is discussed in Chapter 2. Deducting the use of your car when working as a volunteer for charity is discussed in Chapter.

For more information, see IRS Publication 463, Travel, Gift, and Car Expenses and IRS Publication 535, Business Expenses.

Business Use of Your Personal Car

According to the U.S. Department of Transportation's Federal Highway Administration, Americans drive their cars on average 13,500 miles each year, although this didn't hold true in 2020 and perhaps in 2021 due to COVID‐19‐related restrictions. The cost of driving can be high when you factor in gasoline, insurance, and other costs. But the tax law lets a portion of the cost of this mileage be deductible under certain circumstances.

Benefit   

If you use your personal ...