Personal Vehicles Used At Work

• If you use your personal vehicle at work, as opposed to using it to get to work, you can write off the cost of the mileage you drive. Any mileage you incur in non-commute work-related activities, such as if you drive to a client meeting outside your office, can be deducted. The IRS allows you to either write off the actual cost of driving or to simply claim a preset rate per mile, which is the easier option for most people. The rate varies from time to time, but is set at 55.5 cents per mile for the last six months of 2011. Your ability to write off the use of your care for work-related purposes will be subject to the limit applied to all unreimbursed employee expenses. In the 2011 tax year, the limit only allows you to write off expenses of this type that exceed 2 percent of your adjusted gross income.
  
  

Personal Vehicles Used for Charitable Purposes

• If you use your car for charitable purposes, the IRS also allows you to deduct that mileage as part of your broader deduction for charitable giving. The charitable mileage rate sits at 14 cents per mile as of Sept. 1, 2011 and, although it can change, it is set by statute and fluctuates less frequently than the standard mileage rate for work-based driving.
  
  

Registration and Sales Tax Write Offs

• Any portion of your car registration fee that is a tax can also be deducted including excise fees, vehicle license fees and any other registration taxes that are tied to the value of your personal vehicle. In addition, if you bought a personal vehicle, you can deduct the sales tax you paid if you choose to deduct your state sales taxes instead of your state income tax.
  
  

Credits for Electric Vehicles

• Although the credits for hybrid and lean-burn diesel vehicles that were prevalent in the latter part of the first decade of the 2000s have mostly expired, the IRS still allows purchasers of certain types of electric personal vehicles to claim a $7,500 tax credit. As of the 2011 tax year, this credit applies to both plug-in hybrid vehicles, such as the Chevy Volt, as well as fully electric cars like the Nissan Leaf, Wheego LiFe and Smart fortwo EV. As a nonrefundable credit, it cannot reduce your taxes below zero, but it can yield you a refund if you overpaid your taxes through withholding.