What is Trucking liability and cargo insurance? This article will describe the critical features of trucking liability and cargo insurance.
Importance Of Buying Trucking Liability And Cargo Insurance
Your company’s car ownership and running charges are legitimate business costs. Repair and upkeep costs are also included. You may also deduct related costs like car insurance, license plate fees, and property taxes, although the Internal Revenue Service has restrictions on deducting car expenses.
Typical Mileage of trucking liability and cargo insurance
The IRS releases a standard mileage rate each year that should be applied to any business miles traveled during that year. The price per mile in 2012 was 55.5 cents. In addition to the price of gasoline, the standard rate is determined to take into account additional running costs including insurance, depreciation, and repairs. Consequently, you are unable to use the usual mileage rate and write off repair expenses for the exact vehicle.
Individual Miles
You must divide the miles you travel for personal and commercial purposes if you use your automobile for both. Personal costs cannot be deducted. You can figure out how much of the repair you can write off as a business expense once you know the percentage of mileage that relates to your particular industry. For instance, you would use 80% if you travelled 100,000 miles and 80,000 of those miles were directly relevant to your work. You might deduct $800 off a $1,000 repair charge as a business expense.
Date of Expense
Depending on your accounting technique, you may be able to deduct a business expense, like a car repair, for a specific tax year. Use the year you pay for the repair if you use the cash method of accounting. If you use the accrual method of accounting and the repair is finished, and you know how much you will have to pay for it, you can claim the business expense in the year that the repair was made.
Repair Expenses Paid
Repair expenses for which you were compensated cannot be claimed. For instance, you cannot claim a deduction for the repair if the client who caused the damage that required it chooses to pay you back for your out-of-pocket costs. If you receive money through an insurance provider or warranty plan, the same rules still apply. You can write off the difference as a business expense if the reimbursement amount is less than your actual repair costs. The difference, if the reimbursement exceeds the actual cost, is taxable income.