How Do Vehicle Deductions Work for Law and Medical Professions?

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How Do Vehicle Deductions Work for Law and Medical Professions?

When considering vehicle deductions from expenses of your practice, an advisable first step would be to treat this no differently than other areas of deduction. Meaning that once you begin your research or consult with a financial advisor, you will need to have the preliminary numbers in order before you can move on to deductions specific to you.

Vehicle deductions

As we advance, significant variables to keep in mind include the type of vehicle you are driving, the state you and the car reside in, and specific business qualifications that may go beyond what you could get deducted as an individual exclusively. 

Vehicle Deductions Process.

When using the mileage rate method, business owners should track their business mileage for a car they own and as of 7/1/2022, 62.5 cents per mile are eligible for deduction. 

For both Legal Professionals and Medical Professionals, you may also choose to purchase or lease a vehicle.  When doing so, the vehicle deductions process is relatively the same in terms of the steps needed to file any other deduction with the IRS.

That being said, whether you are purchasing or leasing a vehicle, be sure to register that vehicle in the company name.  This may increase your insurance costs, so just be mindful of this. 

You may also use this vehicle for non-business matters, so be sure to take note of any time the vehicle is used in such a manner.  When purchasing a vehicle, the intent and weight of that vehicle come into play.

For example, a medical practice that purchases a small bus for patient transport will have no problem deducting 100% of that vehicle over time.  But a lawyer trying to write about a Ferrari may run into some obstacles.

There are still some benefits for any Legal Professionals and Medical Professionals who purchase a vehicle over 6000 lbs in gross weight, such as larger SUVs.  We are happy to discuss that with you on a one-to-one basis, as it does involve some more planning than detailed here in this article.

As always, each individual situation is unique, and here at Interactive Accountants, we make it our mission to help our existing clients and overcome the challenges we encounter in an ever-changing business environment.  

What’s next?

We have many more ideas and services to help you and your business thrive. Here at Interactive Accountants, assisting businesses to grow and succeed financially is our number one goal.

We are here to help! If you’re still not convinced yet to give us a call, feel free to look at our other blogs regarding the help we offer medical services and businesses.

If you are a professional in any of the healthcare fields, you will need a CPA firm that understands what your company does and what it needs. So give us a call or schedule a free consultation here with our owner Matthew Shiebler, CPA.

He’s been practicing accounting for over 25 years and is a business owner, just like you! Additionally, feel free to look at some of our other articles regarding vehicle deductions on our main website under news!  Be sure to also check out our podcast, the Interactive Entrepreneur on Spotify, and other major podcast apps.