Tax filing time is coming near and everyone is busy for getting the tax calculation done. Whether it’s your lawyer or you yourself calculate it, tax deductibles can be a great blessing a t this time. Now after considering all points, you find the tax still a lot to pay. So what to consider next for the deductions?
Having a car of your own? Do you use it for personal as well as business issues/ then consider the auto insurance premium as the tax deductibles. It is now can be considered under the tax deductible section. Thus one can make the expense of the car turned to an income way by deducting the premium amount paid every month. Now there are many clarifications given for the tax deduction for auto insurance payers. Here is detailed information about this point to guide people to apply for the tax filing with the deduction.
Different scenarios to consider the tax deduction of the auto insurance
In case you are self employed with the car that you own then it is under the tax deduction category. The fact is more like this one may be using the vehicle for personal use, but most of the usage is being done for the professional purpose. So in that case the tax deduction can be done for the auto insurance premiums. There different case study is being given to have a more clear idea about it.
- If you are a business person and the vehicle is being used for the travelling to the clients place. So consider it as the 60 % of your total usage. Thus 40% is being considered for the personal use. So the 60 % of your auto insurance premium will be considered for the tax deduction. The tax deduction is being done based on these 60 % portion, excluding the 40 % which is being considered for personal use.
- For the freelancer or part time worker, it can also be considered based on the calculation done on yearly basis. While you are working with your vehicle to travel to location that would be considered as the working time. The miles traveled will be calculated. Let it be taken that if you have travelled 300 miles in a year, 50% is being used for the working purpose. So the 1500 miles which is nearly 50% of your total can be deductible from the premium. That 50 %of the premium amount is allowed to be deducted from tax.
- Now the salaried person who is involved with a permanent incoming source can also get this benefit. In this case, errands running can be a point to get the benefit. If the errand is not being reimbursed by the employer, then the amount of miles will be calculated. That particular portion will be deducted for the tax payment.
Thus based on the use for the business or professional purpose, the tax can be deducted. This totally depends on the type of professional that the individual is connected with. Base don it the deduction will be calculated.
Car insurance Singapore is a common thing which is being to most of the car owners. Though there are many factors which are being considered before giving the insurance. The premium which has to be paid also depends on various bases. Thus the tax deduction will also vary from one to another. There are some non eligible expenses of the vehicle too. This expense is not being considered under the tax deductions. Within this expense it would be only considered which is not being reimbursed. Though the self employed person will have everything eligible spend for business. But for the salaried person, if the expense is being reimbursed by the employer it would not be considered under tax deductions.
In the tax deduction section, the different types of vehicle are being considered differently for the tax deductions. Not all vehicles are being considered as same one. The top o the list is the scooters, bike, and bicycle. Other IRS specified vehicles that are excluded from tax benefits are the taxis moving vans and the ambulances. List also has the vehicles which are weighing more than 6000 pound of weight.
Keep in mind these small points of getting deductions
Here are some tips to calculate the specific way of tax deductions:
- More the miles, the more the money that is deducted. So mileage is a big factor that has to be considered very seriously. If you are being assigned to visit any clients and from there you can go to airport t meet another client or visit to buy the raw materials, then automatically it is being calculated for work purpose. Therefore calculating the mileage driven per year can help you to get the benefits. It is being said that more the mileage travelled more is the money that you get in return of the tax.
- Now how to get the exact mileage travelled? So keep a habit of recording everything about your car necessary for tax payment. It is a most important thing to keep a good record of the driven mileage. It is better to maintain a record which can have the details like the purpose of the trip, Destination, hours travelled, mileage covered. Thus this would surely help you to get the exact thing at the exact time of the tax filing.
- The tax deduction is also on the expenses that are being spent on parking and tolls. So keep the documentation ready with you and maintain it in the record.
- Maintaining a good look is the main way to carry a profession. So the car washing and the polishing is also included under the tax deduction. This would require documentation of the above mentioned service. So after every washing and polishing don’t forget to take the bill and staple it with the records maintained for that day.
- Faced an accident which has no fault of yours? Then you must be reimbursed by the other drivers insurance. But in many case you will get the full reimbursement from them. In that case the un-reimbursed portion is totally deductible.
HL assurance tells you all these ways to get the deduction for the tax payers. There are many clauses that are under this. So if you are not aware of such facts, then it is better to consult any lawyer for the task. They can help you to get all the unmentioned points and give you a huge discount in the taxable amount. Thus while the time comes to file your tax, it is better to handle the auto insurance part through an employee. Every detailed part can be covered by it.
Make use of your personal car as business
But one thing that has to be kept in mind is that: “if you are not using your car for business purpose then you cannot claim the auto insurance as a deduction”. So even if you own a vehicle and paying high premiums for it, then better make use of it for any business purpose. It will not only help to get the premiums back but can be another way of getting an income source. Better think of it in other way and get the benefit of the law. Still if you are using the vehicle as personal use, then consider this fact.