Tax write offs do they amount to anything substantial??

swampratt

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Talking about the Mileage on your vehicle and taxes paid on houses for instance.

I do know of one comparison.
Friend of mine had a huge expensive house living there single and claimed over 10,500 in interest alone on his taxes.
The next year after he sold it he was living in a small not expensive house and paid less than 2,000 in interest.


It made less 200 dollars difference on his taxes.

He came to the same conclusion I did many years earlier ..PAY OFF THE HOUSE.

Now onto the car mileage deduction $0.62 a mile deduction..Is that for real 62 cents a mile?

So if you drove a car just for business like deliveries and went 40K miles a year.
$24,800 you can write off?

Will it end up like the above and only result in pennies difference?

More math buddy drove 140 miles round trip and company paid him $35 bucks.

$86.80 can be wrote off for the mileage at .62 a mile.. Really.

With that math it looks like you can make 56 bucks off the government at the end of the year for that single trip.

Yea you get taxed on about 33% of what you make so cut that into thirds. you still make 60 bucks.

Is my math flawed?
Help me out tax guys because is seems like a decent gig.
 

ssgrock3

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interest on your home is one of the best. Car mileage for most people is hard to get, Realtors on the other hand is easily justifiable. If you are a w-2 employee it is tough to get. Taxes I don't believe are tax deductible. the new tax rate for mileage is .65.5/ its a deal when i was going to tulsa/bixby/Bartlesville a couple times a week. I paid off my car with my mileage checks lol.
 

SlugSlinger

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It’s hard for folks to meet the minimum standard deduction since Trump raised it. The 2023 federal standard deduction is 27,700 for married filing jointly.
The 2022 is 25,900.
In other words you would need a lot of write offs to benefit from those write offs.

And those write offs, depending on the type, only reduce your tax liability by the marginal tax rate you pay. So if you’re in the tax bracket of 22%, every dollar of write off reduces your tax liability by 0.22.
 
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SlugSlinger

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trekrok

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The thing on IRS mileage is that it represents a real cost. I mean, if I drive 100 miles and get $65 reimbursed (or I deduct it) it's not just free money less the gas. It's the maintenance, tires, depreciation of the vehicle etc. So, yeah, you can probably make some money on it if you are driving an older vehicle that's bottomed out on depreciation age and high mileage. But, I don't see anyone profiting from it on a newish vehicle. Not after really factoring in the cost of driving a mile.
 

swampratt

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The thing on IRS mileage is that it represents a real cost. I mean, if I drive 100 miles and get $65 reimbursed (or I deduct it) it's not just free money less the gas. It's the maintenance, tires, depreciation of the vehicle etc. So, yeah, you can probably make some money on it if you are driving an older vehicle that's bottomed out on depreciation age and high mileage. But, I don't see anyone profiting from it on a newish vehicle. Not after really factoring in the cost of driving a mile.

Let me slip some math in here on that 65 bucks for 100 miles traveled.
My car needs new tires every 24,000 miles $100 each mount and balance, road hazard included and every 3000 I change oil and filter lets call that $35.

$280 oil changes and $400 in tires. Insurance $300 washing it $50 = $1,030
$0 .65 x 24,000 = $15,600

$15,600 ÷ 12 = $1,300 That was for a month break down.

Even if you had a hefty car payment and expensive tires this looks like a win.

30 MPG 24,000 miles would be 800 gallons of fuel say $3 a gallon $ 2,400 in fuel.
 

O4L

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In my limited experience with the mileage deduction, it can make a big difference come tax time. It's been a while since I've had mileage to deduct so things may have changed but it sure came in handy for me.

I used to have a neighbor that would get a new truck paid for every few years from mileage deductions.
 

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