The way to work, tax and insurance – all sorts of costs come together around the car. No wonder that motorists want to save or wonder which of these expenses can be claimed for tax purposes. In specific cases, it is possible to deduct the vehicle costs. However, employees have different rules than self-employed workers. But which requirements must be met in each case in order to be able to sell car costs? The Glass family guide explains.
Car costs deduct – Prerequisites
Who is entitled to deduct the vehicle costs?
The car tax deduct – bonus for the self-employed
Who can deduct car costs, depends on the occupational group and the cost point. The car tax can settle only self-employed and entrepreneurs. By contrast, operating expenses can be deducted from the costs incurred for professional journeys with one’s own vehicle. Here it depends on what percentage of a vehicle is used for professional or private purposes. The travel costs also fail in the category of car costs deduct. Employees can make tax deductions for journeys between their place of residence and their workplace using the so-called distance allowance as income-related expenses. Travel costs incurred may only be reported by public transport users to the Treasury. In addition, people with impairments may claim their travel expenses completely for tax purposes. Landlords who rent a home or property may also, under certain conditions, deduct a number of trips related to repairs, property management or purchases. Even if employees can not claim the motor vehicle tax, they can do so with motor liability insurance.
In specific cases, it is possible to deduct the vehicle costs. However, employees have different rules than self-employed workers.
When does the vehicle count the operating assets?
When it comes to car costs deductible, the heading operating costs is the right choice in the tax return, but here only for entrepreneurs and self-employed. All items that serve the purchase or receipt of the car can be validated. The occupational use must be actually given. In order to be defined as a necessary business asset, the legislator prescribes a service of at least 50 to 100 percent. But deducting car costs also works for cars that are used less official. A vehicle that is used between 10 and 50 per cent, falls under gewillkürtes business assets. In this case, the owner must decide whether the car should count as a professional or private property. For professional use, it is possible to sell the motor vehicle costs proportionately. If the car is less than 10 percent used for work, it automatically counts to private assets.
Which prerequisites and conditions apply?
The car tax deduct
Motor vehicle costs can be deducted by the self-employed, if the official use over 50 per cent amounts to. In this case, the vehicle counts the business assets. If less than 50% is used, the costs can be claimed pro rata. With a use that is more than 90 percent private, the legislator is putting a stop to it.
Deduct the car acquisition costs
If a new or used vehicle is purchased and used for business purposes, the total is not fully included in the operating costs. Over a specific period of time, it is possible to deduct vehicle costs by writing off the sum from self-employed and entrepreneurs. The annual depreciation amount is to be recorded as an operating expense in the tax return.
The motor liability insurance deduct
An employee who is also an insured person may claim his contributions to motor third-party liability insurance for tax purposes. This does not include the comprehensive insurance. There are two ways to sell these car costs. Either they run the advertising costs or the special editions.
The distance charge
In the area of car costs, the distance charge is actually the classic domain of the employees. But if the operational use of a car is only between 10 and 50 percent, it does not always pay to classify the vehicle as a business asset. In this case, distance flat rate and liability insurance are interesting for the self-employed.
If you take a business trip with your car, you can also claim the travel expenses for tax purposes. The same applies to travel expenses in job interviews.
Amount of deductible costs
Which costs can be deducted, which not?
Discontinue car costs: This can be claimed by the self-employed
- All running vehicle costs
- Acquisition costs of new and used vehicles in the form of annual depreciation
- Traveling expenses
To determine travel costs, most self-employed people use the 1% method. The gross list of the vehicle is used to calculate the monthly usage share of 1 percent. This method is independent of the number or the distance of the actually driven routes. Expensive vehicles are taxed higher than small and cheap cars. Entrepreneurs who are subject to VAT must pay attention to the taxation of the portion of use, which leads to less favorable tax results. Alternatively, the logbook can be kept completely. Mileage, date and travel reason must be documented. Private rides are deducted at the end of the year. The tax offices very carefully control why many self-employed people use the 1-percent method.
Dismissing car costs: Employees can claim this from the tax office
- Travel expenses in the form of distance allowance within the advertising costs
- Motor vehicle liability insurance and accident insurance