The IRS Deductions Blog

Archive for the ‘Car Tax Deductions’ Category

Question: Car: Leasing better for small business owner?

Does the owner of a small business gain any tax deduction or other financial advantage by leasing a car rather than buying it with cash or through an auto loan?

Answer: If you can pay cash, always pay cash. You might get a better price.

It never EVER makes sense to lease a car. Some might tell you differently, but you can take my answer straight to the bank.

Sure, your payments will be less. But at the end of the lease, guess what? You owe a boatload of money. Basically, you’ve been renting the car.

Tax implications don’t matter, although you can write off a purchased car as easily as a leased one. The bottom line is, do you want a rented fancy car with a small payment, or a nice car that’s paid for?

People get rich by keeping the same car for years. People stay in debt by getting new cars every 3-4 years—-by leasing.

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Virtually everyone has suffered a loss at one time or another from either a casualty disturbance of some sort, which can be covered by casualty insurance , or outright theft.

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Question: Will auto insurance pay for previously fixed stone chip because it broke again in another accident?

Hi, I had a tiny stone chip on my windshield which was beautifully fixed to the point it could not be even seen. However, I had another car bumped into mine on a parking lot. In addition to a bent fender and bumper, the stone chip gave away and even spread new rays. All because of the lateral force of the impact–even my inside rear view mirror was pivoted.

Insurance company said, since it was not damaged directly because of the accident, and had a previous damage to it, they will not cover that under this claim.

Can I still make them pay under the above claim and not another separate one, where my deductible will kill it anyway.

Thanks!!

Answer: The other carrier IS liable for at least part of the damage to the windshield.

In a best-case scenario, your windshield was properly fixed by a reputable company the first time. They can not claim their driver isn’t responsible for the windshield any more than they could claim they weren’t responsible for damage to a properly repaired bumper. Just because it was damaged once does not mean it’s automatically ineligible for future repair.

In a worst-case scenario, they’re responsible for the EXTRA damage to the windshield. Accept responsibility for the chip, but they’re responsible for all of the cracking. The cracking makes it unusable, so they need to pay to have it replaced, minus a small amount for the existing damage. This principle is called ‘betterment’. They owe you a windshield with a chip in it, since that’s what you had before the accident. Since it’s not legal to put in a windshield with a chip, they put in a new one and make you pay the small amount for the chip that existed, since your new one is ‘better’ than the old one.

My advice, if you don’t feel like fighting with the other driver’s insurance, is to file a ‘glass-only’ claim with your insurance. Most companies offer ‘glass-only’ coverage with a lower deductible, usually $100. Have them replace the windshield and then they can send the bill to the other company in a ’subrogation action’. Your insurer won’t get the short end on this and when they get their money back, they will refund the deductible to you.

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Question: Is the 2009 tax deduction itemized or is it added to the standard deduction?

I purchased a new car and was informed that i could deduct the sales tax. Filed my return but my preparer said that the standard deduction was greater than the sales tax of the vehicle so it didnt make sense to itemized it. I thought this tax deduction was in addition to the standard deduction?

Answer: You won’t get many answers here as the category is Taxes > Canada and this is a US question.

Your preparer is wrong: follow the instructions for form 1040 line 40a and Schedule L.

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Does your business need tax help? Here’s what to avoid

Tax season is here, and deadlines are coming up a lot faster than most of us want to admit. If you’re stressing about income tax returns for your business, here are some helpful tips from the Associated Press.

TaxPlus – Tax Tips “Business Use of Vehicle”

Question: Will auto insurance companies let me make payments for a deductible?

Or is the entire amount due up front immediately?

Thanks!

Answer: You don’t pay your deductible to the insurance company, it is owed to the shop that completed the work on your car. The insurance has already sent the shop what they owe them, you have to pay them the deductible.

You could contact the shop to see if they will work with you on the deductible. It is up to them

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