4 Tax Deductions Drivers Always Miss Out On

If you drive regularly, there are several tax deductions you might miss out on. Here are five of the most common ones.
Written by Ben Guess
Reviewed by Kathleen Flear
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With the 2021 tax season coming up, it’s a good time to make sure you’re cashing in on all the
tax deductions
you can. If you drive a car, there are a few different deductions you should check out in order to make sure that you’re saving as much as possible. 
With a little help from our friends at
TurboTax®
, here are four of the most easily-missed tax deductions that drivers can use to save.
A person with three leather bracelets and silver nail polish sits with a manila folder full of tax paperwork, their phone calculator, and a pen in front of them.

#1: Mileage deduction

Another tax deduction that drivers often miss is deducting miles logged while driving for charity, business, or medical purposes. Here’s what’s required to be eligible for each:
  • Charity: If you drive to volunteer somewhere, the IRS allows you to deduct 14 cents per mile. However, you must be the one volunteering—you can’t make deductions for driving someone to volunteer.
  • Business: If you work for yourself, you can deduct 56 cents per mile for every trip to and from your workplace. Using the
    telematics feature on Jerry’s app
    is an easy way to track your miles (and potentially save money on car insurance). 
  • Medical treatment: You can deduct 17 cents per mile for every trip to and from a hospital, doctor’s office, or pharmacy. However, you can only deduct medical expenses that are more than 7.5% of your adjusted gross income. If your mileage remains lower than that, it is unfortunately not deductible.
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#2: Electric vehicle or hybrid credits

If you bought a
hybrid or electric vehicle (EV)
in 2021, you may be eligible for tax credits. A new EV can earn you a federal tax credit of up to $7,500 or whatever your tax bill is, whichever is lower. (For example, if your tax bill ends up being $5,000, you won’t get a $2,500 refund.) 
The tax credit you can get for a hybrid vehicle depends on the individual vehicle, but tends to range from about $4,500 to $7,500. 
It’s worth noting two things, however: one, you cannot get a tax credit on a Tesla. These credits are being phased out as sales increase, and since Tesla hit the 200,000 sales mark already, you can no longer get a tax credit for owning one.
You also are not eligible for an EV or hybrid credit if you are leasing your car, as opposed to owning it outright. If your car is leased, the credit will go to the manufacturer instead.

#3: Donating a car

If your car is getting older and may not last much longer,
donating it
could be the right thing to do—both financially and morally speaking. While you can always sell your car, donating it both saves you the hassle and ensures that you will be able to deduct the car’s remaining market value from your taxes. 
If you’re unsure of whether or not you’d be able to get much for your car by selling it, look into donation centers for older vehicles near you.

#4: Car sales tax

If you bought a car in 2021, and if you itemize your deductions and choose to deduct your state and local sales tax, you can deduct the sales tax from your vehicle. While you cannot claim more than $10,000 in sales tax, this is still a good way to save on what is often an expensive purchase.

How to make sure you aren’t leaving tax deductions on the table

MORE: Toyota and Honda Feel Left Out of America's EV Tax Credit Plan
While it’s great to know which deductions to look out for, they can be a lot to try and remember all at once. If you want to make sure you get as many tax deductions as possible, you should turn to the experts. 
Thankfully, getting your biggest possible tax refund has never been easier. Jerry is teaming with
TurboTax®
, the #1 best-selling tax software, to help you get your taxes done right–your way:
  • File your own taxes. Answer easy questions and
    TurboTax®
    will guide you to your maximum refund –plus, those with simple returns file free with TurboTax Free Edition.
  • Help from real tax experts. TurboTax Live makes it easy to get expert advice and answers as you go, with a final review before you file for complete confidence.
  • Taxes done for you. A dedicated tax expert can handle everything, from start to finish, with TurboTax Live Full Service.
Jerry customers can take advantage of special savings of up to $20 – get started
here with TurboTax®
today!
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