You’ve probably heard that if you drive your personal vehicle for business, you can deduct mileage.
But here’s what most business owners don’t realize:
There’s a hidden vehicle depreciation tax deduction built into every mile you drive.
See, when you take the IRS standard mileage rate—or your S or C corp reimburses you for it—that rate includes more than just gas and maintenance…
It includes embedded depreciation.
That means the IRS assumes your car is losing value every mile—and they let you deduct for that, too. (This is tax strategy, folks.)
But here’s the hidden gem: when you go to sell or trade in that vehicle, you could be sitting on a big vehicle depreciation tax deduction tied to that depreciation.
Let’s say you bought a $50,000 vehicle in 2021 and used it 80% for business.
You drove 40,000 business miles. You sell it today for $20,000.
Most people think that’s it.
But you? You might qualify for a $12,937 ordinary loss deduction—and that loss could offset your other income.
This isn’t a loophole. It’s right there in Section 1231 of the tax code. But barely anyone talks about it.
If this sounds like you—or even close to it—you could be leaving money on the table.
And we don’t want that now, do we?
When you are ready to start protecting more of your profits, schedule a call here. We look forward to talking with you!
To building wealth the smart way,