Many people wonder if car washes can be deducted on their taxes. It is a good question. Taxes can be confusing. Knowing what you can and cannot deduct helps you save money. This article explains if car washes are tax deductible.
What Does Tax Deductible Mean?
First, let’s understand what “tax deductible” means. When something is tax deductible, it lowers your taxable income. This means you pay less money to the government. For example, if you earn $50,000 a year and have $1,000 in deductions, you only pay taxes on $49,000.
Many expenses can be tax deductible. But not all expenses are allowed. The rules depend on the type of expense and how you use it.
Personal vs Business Expenses
It is important to know the difference between personal and business expenses. Personal expenses are things you buy for your own use. Business expenses are costs related to running a business.
The government allows people to deduct business expenses. But personal expenses are usually not deductible.
For example, buying food for yourself is personal. Buying food for a business meeting is a business expense and may be deductible.
Are Car Washes Personal or Business Expenses?
Car washes are usually personal expenses. People wash their cars to keep them clean. This is not related to making money. So, most car washes are not deductible.
But what if you use your car for work? Can you deduct car washes then? It depends.
When Can Car Washes Be Deducted?
If you use your car for business, some costs may be deductible. This includes car washes. But only the part that relates to business use.
For example, if you are a delivery driver or a salesperson who drives a lot, you might deduct car wash costs. You must keep good records. You need to show how much you use the car for business.
Example:
- You use your car 60% for business and 40% for personal use.
- You spend $100 on car washes in one year.
- You can only deduct 60% of $100, which is $60.
How to Prove Business Use of Your Car?
The IRS wants proof. You need to keep a mileage log or a record of trips. Write down dates, miles driven, and purpose of the trip. This helps you show which trips were for work.
Without good records, you cannot claim car wash deductions for business.
Self-Employed vs Employees
If you are self-employed, it is easier to claim business expenses. You report expenses on your tax return.
If you are an employee, it is harder. Since 2018, employees cannot deduct unreimbursed expenses. This means if you pay for car washes but your employer does not pay you back, you cannot deduct them.
So, employees usually cannot deduct car wash expenses.
Other Vehicle Expenses That May Be Deductible
Car washes are just one part of vehicle expenses. Other costs may be deductible for business use. These include:
- Gasoline
- Oil changes
- Repairs
- Insurance
- Lease payments
- Depreciation
These costs must relate to business use of your car.
Two Ways to Deduct Vehicle Expenses
The IRS allows two ways to deduct car costs:
- Standard Mileage Rate: You multiply business miles by a set rate.
- Actual Expense Method: You add all car expenses, including car washes, and multiply by business use percentage.
If you use the standard mileage rate, you cannot separately deduct car washes. The rate already covers those costs.
If you use actual expenses, you can include car washes in your total costs.
Credit: cssiservices.com
