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In this episode, we dive into understanding tax deductions for mileage and vehicles. We get lots of questions about vehicles before the end of the year because people want to know if they can buy a vehicle with all of their profit and get a tax deduction for it.
Well, hopefully. Like all tax subjects, things can get a little confusing because there are different options to consider.
You shouldn’t just spend your money to save on taxes. At the end of the day, it’s a profit decision that you need to make.
The reality is every situation is unique, every business is unique, and every business owner is unique. Their cash flow and tax situations are all different. Therefore, you need to understand that tax is not a one-dimensional thing.
There are a lot of scenarios that need to be covered; that’s why you need to talk to your tax people. You can’t just read things on the internet, watch videos on YouTube, join a Facebook group, and make profit decisions from there. It just doesn’t work that way.
In this episode, you will hear:
- How to keep track of your business mileage consistently
- What the reimbursement rate for mileage is
- Buying the vehicle inside the business vs. personally
- Using cash from profit to purchase a vehicle (Section 179)
- How a fringe benefit works and types of vehicles that qualify for purchase
- Buying new vs. used vehicles
- Purchasing vs. leasing cars
- Why you need to have a good accountable plan
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