Looking into getting your business on the road with a fleet of vehicles? Don’t be too scared… here are some tips that can help!
1. Register the Vehicles under Your Business
Make sure that when you register your commercial vehicles, you do so under the business name. This will save you money and headache down the road. Check out this link for more information from the Virginia Department of Motor Vehicles: VA DMV – Commercial Vehicles
2. Write Off Mileage and Maintenance
If your vehicle is used only for business needs, you can deduct the whole cost of operating the vehicle.
If a vehicle is both for personal use and commercial, there are two options:
- Standard mileage rate. Annual business miles driven multiplied by a standard mileage rate. The standard mileage rates for 2020 are $0.575 per mile. So business mileage x $0.575 = tax deduction.
- To track miles driven for business, keep a log of mileage. Make sure it’s accurate with times, dates, and miles travelled. Do not include commuting time to and from your home. Those are personal commuting expenses.
- Actual expense method. Write down all of the annual expenses of operating the vehicle. Gas, oil, repairs, tires, insurance, registration fees, and lease payments. Multiply those costs by the percentage of miles driven for business.
3. Look for Incentives
Some companies will offer incentives with their vehicles to sell you on their brand. Shop around and see what kind of incentives fit your business best. For example, Nissan offers a $1000 upfit allowance with their 2020 NV Cargo Van to customize the interior while Ford offers a $1250 upfit allowance with their 2020 Transit Connect van. Just do some research and figure out which brand is offering the most bang for your buck.
4. Best Time to Buy
Buy vehicles towards the end of the year, in the fourth quarter. Dealerships are making room for new models while also trying to hit quotas and decrease inventory for taxation purposes. Look for sales during holidays.
5. Commercial Vehicle Insurance
Along with other expenditures for a work vehicle, insurance premiums are tax deductible. Just know that you’re only able to write off insurance expenses if the sum you’re able to deduct is more than the standard deduction.
Here are some resources to shop around for the best fit for your company:
We hope these have helped you! As always, if you need help with servicing your fleet, know that we’ll come to you.