Carl
Level 15

Deductions & credits

To answer your questions:

can my education expenses be deducted?

No. According to IRS Tax Top 513 at https://www.irs.gov/taxtopics/tc513

"To be deductible, your expenses must be for education that (1) maintains or improves your job skills or (2) a law requires to keep your status or occupation. However, even if the education meets either of these tests, the education can't be part of a program that will qualify you for a new trade or business or that you need to meet the minimal educational requirements of your trade or business."

What can I deduct as it relates to this new vehicle?

Since this purchase will be the purchase of a personal vehicle that most likely will be for both personal and business use, it is important that you keep mileage logs from the day you drive the vehicle off the lot. Your best bet is to take the "per mile" deduction, which for tax year 2019 is already set at 58 cents per mile for the 2019 tax year. 26 cents of that 58 cents per mile is for vehicle depreciation. It is "IMPORTANT" that you keep track of your business use miles as you will be able to deduct 58 cents for each business mile driven. It is also equally important to keep track of your depreciation amount from year to year too. These amounts change every year, based on the economy and average/expected price of fuel. These figures will matter when you sell, trade in, or otherwise dispose of the vehicle in the future.

You "may" have the option of taking the actual expenses deduction for the vehicle. But I recommend the per mile deduction because in my experience that has always provided the greater tax break in my 15 plus years of self-employment.

For more details about business vehicle use, see https://turbotax.intuit.com/tax-tips/self-employment-taxes/standard-mileage-vs-actual-expenses-getti...