02 Aug Are There Car Tax Deductions for Real Estate Agents in 2019?
If you’re a real estate agent, you probably drive your car a lot for work.
You’re probably wondering if there are car tax deductions for real estate agents like you.
The short answer: yes.
It’s a simple process of changing your personal vehicle to your “business vehicle” on your tax return. At that point, the car is worth a tax deduction that is, at most, equal to the value of the car.
For example: if Sally buys a car for $10,000 to use in her realty business, it will qualify for a tax deduction. This deduction is based on how much the car is used for the realty business versus how much it used personally. If Sally uses her new $10,000 car for her realty business 80% of the time, then she can take a tax deduction of $8,000 for that year. Simple, right?
When it comes to mileage deductions, it’s important to be accurate on those. If the IRS thinks that you could be fudging the numbers to claim a higher deduction, then you could be at risk for an audit.
When converting your vehicle from personal to business, you can easily pinpoint how much you can claim as a deduction. For a new car, the amount you paid is how much the car is worth. If it’s a used car, look it up on Kelley Blue Book to find the fair market value. Pick the smaller value in the “fair” range.
In short the formula for vehicle deductions is: car value x % driven for personal reasons = total tax deduction
Once you know how much your car is worth, then you just multiply it by how much you drove it for personal reasons to find the total tax deduction you can claim.
Car tax deductions for real estate agents have saved many of our clients hundreds if not thousands of dollars!
If it’s all still a bit confusing to you, feel free to call us at 614-524-4888! One of our tax experts will gladly walk you through the whole process.