Four strategies for getting deductions on the vehicles you’re driving now
Strategy #1: Take your child’s car and sell it. (It’s not so cruel. You can always buy them a new one!) Perhaps your child or spouse is driving your old business vehicle. If that’s the case, it could be the source of a big tax loss.
Strategy #2: If you’re self-employed, use the “buy and sell” strategy. The Tax Cuts and Jobs Act eliminated the tax-deferred exchange for vehicles. Which means many self-employed taxpayers will come out ahead because their trade-ins automatically take advantage of the buy-and-sell.
Strategy #3: Cash in on past vehicle trade-ins. If you have been trading in your cars, calculate your adjusted basis and compare it to your possible selling price to see your expected gain or loss on the sale (including trade-in). If the loss is large and you need a tax deduction, sell or trade in that vehicle by December 31.
Strategy #4: Put your personal vehicle in business service. Lawmakers reinstated 100-percent bonus depreciation for 2018. That creates a winning strategy that doesn’t cost you a penny but can produce solid deductions.