How to declare a car or motorcycle on income tax?

How to declare a car or motorcycle on income tax? post thumbnail image

Declaring a car on income tax is a necessary step every year if you own a vehicle or have made transactions involving one. The same goes for motorcycles.

As the next tax return is approaching, we have prepared these instructions to help you answer questions about how to do this in IR 2022.

Here are the main guidelines:

Step by step on how to declare a car on income tax

To declare a car on income tax, you need to follow a few steps, starting with accessing the page where the declaration is made.

Then, you will have to fill in the information regarding the vehicle, depending on the situation in which it finds itself.

Still without insurance for your car?

Access the IR page

The first thing you must do to declare a car on income tax is to access the IR page. There, there will be the option to use the e-CAC, a virtual service center for those who have a digital certificate or to download the program from the Federal Revenue Service.

After choosing one of these two paths, you must start filling in the tax sheet, as we will show you.

Fill in the sheet

If you have recently purchased a vehicle, you must state this on the sheet. Another important issue to clarify is whether the vehicle is financed, as we will see later. If you have not purchased lately and remain with the same vehicle as in previous years, record this information in the IR.

Filling step by step

When you are in front of the fields for filling in the “Assets and Rights” form, use the code “21 – Land motor vehicle: truck, automobile, motorcycle, etc.” to start.

Renavan’s number will be requested, so have it ready. You can find this information on the vehicle’s license or registration certificate.

This part is done:

  • Look in the “Discrimination” field for places to inform your vehicle data, such as year of manufacture, license plate, and model.
  • When the vehicle is used, look for this information on the transfer document.

If you bought the car in 2021, enter the value zero in the “Situation on 12/31/2020” field. In “Status on 12/31/2021”, enter the amount paid, if you have made this payment in cash.

If you have financed, see the procedures informed in the last topic of this article.

Step by step on how to declare a motorcycle on income tax

It is also important to understand how to declare motorcycles, as some people own both a car and a motorcycle.

In these cases, the procedure to declare your motorcycle in the IR is the same as described above for cars, just follow the same step by step.

How to declare a car financed on income tax?

To declare a car on income tax when it is financed you must:

  • If you go to the same access location, but in the “Discrimination” field, you must declare that the vehicle has been financed.
  • In addition, you need to enter information such as the year of the car, model, total value, CPF or CNPJ of the seller, and the entry value.
  • However, in the “Goods and Rights” form, you must inform what you paid only until 12/31/2021 (sum of the installments plus the down payment).
  • Thus, in “Real Debts and Liens” it is not necessary to include the amount related to the financing. In “Discrimination”, inform that the car is financed, the data about it, and the number of installments paid until the mentioned date.

If in doubt, look for an accountant. But it is very important to point out something that can confuse people a lot when filling in. When entering data about the value of the vehicle or motorcycle, you must enter the amount you paid at the time (that is, the amount for which you purchased). Do not update the value in the IR according to the market currently.

How to declare a vehicle sale?

Anyone who sold a vehicle in 2022 must also report the transaction. To do this, do the following:

  • Go to the Assets and Rights sheet, resetting the position in the “Status on 12/31/2021” field.
  • The seller must add in the “Discrimination” the name and CPF or CNPJ of the buyer so that the Federal Revenue can identify the transaction and with whom it was carried out.

How to declare an old car given as a down payment on the purchase of a new one?

To declare an old car in the IR, you will need to do the following process:

  • In the “Goods and Rights” sheet, download the vehicle given as entry into the purchase of the other, informing the operation carried out, date and value of delivery, name, and CNPJ of the buyer. The “Status on 12/31/2021” field must not be filled in.
  • Inform the acquisition of the new vehicle, creating a new item of good indicating the date of purchase, the name and CNPJ of the seller, and the payment terms.
  • In the “Situation on 12/31/2022” field, enter only the down payment and installments paid in 2022.

How to declare a stolen car or a total loss in IR 2022?

If you are wondering how to fill out the declaration for a stolen car or a total loss and in situations where you have been compensated, check out the following.

Insurance Indemnity in Income Tax 2021

  • In this case, select the “Assets and Rights” tab and in the “Discrimination” section indicate what happened to the vehicle and the amount received for compensation, if any. Also, inform the car details and information about the insurance company.
  • Leave the field “Status on 12/31/2021” blank.
  • In addition, if the amount of compensation is greater than the amount paid when purchasing the vehicle, the difference must be declared under “Exempt and Non-Taxable Income”. In line 2, indicate only the difference from the declared value for the car.
  • And if you purchased another car in the same year, you must declare this in “Assets and Rights”, with the code “21 – Land motor vehicle”. Under “Discrimination”, enter the new vehicle’s data and the amount of compensation with the seller’s information. In the “Status on 12/31/2021” field, enter the amount paid for the car.

Are taxes and vehicle expenses tax deductible?

Not. Vehicle expenses, such as taxes, supplies, maintenance, and overhauls are not tax-deductible.

How do I file a vehicle insurance claim?

Unfortunately, your vehicle insurance payment does not have a legal deduction so there is no need to declare it.

Did you understand how to declare a car in the car and motorcycle income tax? By the way, do you already have insurance for the vehicle in 2022? There are many advantages to getting an insurance quote online! How about starting to quote now?

Avoid headaches: quote your insurance 

More than protecting your car with maintenance and revisions, taking out Geico auto insurance  is essential to ensure that it is covered in the most diverse situations

Once a week, check the fluid level in the reservoir. If it’s too low, there may be a leak. However, do not open the component cover in any way if the vehicle is running or shortly after it has been running.

Finally, do periodic reviews with your trusted mechanic. That way, you don’t let any possible defect reach a critical point.

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