Tax Savings For Your Car
Every year, the mileage rate for taxes goes up. This is caused by the cost of living and/or the cost of gas for your car. The mileage deduction is one of the most common deduction used by home based business owners. This is due to it’s simplicity and most people understand it.
If you have a home based business, the IRS will give you a certain amount per mile that you drive for business. So, the trick is to be able to convert every mile you drive into a business miles. This is covered in my online course.
So, for example, if you drive 15,000 miles in a year and 10,000 of them are business miles, your deduction will be 10,000 x .56 or $5,600. This, on average, translates to a tax savings of $1,120 for 2021 taxes.
Now, the IRS raised the rate for 2022 to 58.5 cents per mile.
The math points to a $50 increase in tax savings over the 2021 rate of $1,120.
But, due to the increased cost of gas, the IRS now raised it to 62.5 cents per mile starting July 1, 2022.
Using our same example, that would be another $65 tax savings for the back half of the year.
Overall, if you do 10,000 business miles for 2022, you will save, on average, $1,210 just for driving your car.
Just that savings will pay for a bit over half of the increase in gas costs.
Now, if you want to go full out and learn to convert every mile to a business mile, you will save $1,815 on average using 15,000 miles as an example.
Either way, if you learn to do this, you will save money on your taxes. You can get the detailed report on how to get the IRS to pay for your gas by clicking here.
The car deduction is just one of many tax deductions available to people who have a home based business.
If you are looking for a home based business, just leave me a comment and I can give you ideas. Even businesses that cost nothing to start nor run!