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Old 10-07-2020, 08:01 PM   #637 (permalink)
redpoint5
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Join Date: Aug 2010
Location: Oregon
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Acura TSX - '06 Acura TSX
90 day: 24.19 mpg (US)

Lafawnda - CBR600 - '01 Honda CBR600 F4i
90 day: 47.32 mpg (US)

Big Yeller - Dodge/Cummins - '98 Dodge Ram 2500 base
90 day: 21.82 mpg (US)

Chevy ZR-2 - '03 Chevrolet S10 ZR2
90 day: 17.14 mpg (US)

Model Y - '24 Tesla Y LR AWD

Pacifica Hybrid - '21 Chrysler Pacifica Hybrid
90 day: 43.3 mpg (US)
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Tax law is way too complex to dive into for your particular situation, but there's many ways to reduce tax liability legally.

If your company reimburses you for miles driven, you get nothing. If they don't reimburse you for miles driven, you probably are eligible for the federal tax compensation for miles driven. If you own a business then you can depreciate (claim a tax deduction based on a percentage of the cost) a new or used vehicle over several years.

It's possible that any unclaimed tax credit can be carried over successive years. For example, my parents purchased a solar system and 26% of their cost is tax deductible. Since they don't have enough tax liability in a single year, they will apply the credit over multiple years until it's used up. They have 20 years to use the credit.

Home office deductions are pretty strict. They basically have to be close to 100% dedicated to business. No storing clothes, sleeping, etc.

There are ways to artificially boost tax liability too for times where a credit cannot be carried over. For instance, you can convert a portion of a traditional IRA fund into a Roth. On paper it appears you've made the amount of money you converted. I'll be developing a strategy soon to have some money in a Roth just for that occasion in the future where I need quick tax liability to benefit from a credit.
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