Where do I deduct AAA dues in the business schedule C?

[PeterM · Accepted solution]

As long as you are claiming your auto expenses using your actual expenses rather than the standard mileage rate, then you may deduct the percentage of the cost of your AAA membership as it relates to the business use of your car (Line 9 of the Schedule C).

In other words if you use your car 100% for business then you may deduct the entire cost. If you use your car 50% for business, then you may deduct 50% of the membership cost.

[ZiggyZ]

Actually, AAA Membership dues are not considered an Auto Expense, as they have nothing to do with or effect the vehicles depreciation, upkeep and maintenance.   

As such, since this expense isn't required to be entered as a vehicle expense, you could enter your AAA Membership dues as a Misc Expense on Schedule-C and you can still take the standard mileage deduction, if you're not claiming actual expenses.

[KHL9007]

I can't answer directly about the tax deduction possibilities, but I agree that it would likely be a miscellaneous expense rather than an auto expense. As a former AAA employee, I can say that this is often one of the most misunderstood things about the AAA membership.  It actually covers the member, not the vehicle.  A road service call can be requested for any vehicle, even if not owned by the member.  We frequently had to clarify this when members would call the office to notify us of a change of car ownership or a new car purchase; they were always surprised to learn that it didn't matter what vehicle they were in or with if road service was needed.  For whatever it's worth! 

[Carl]

In the Business Expenses >> Other Common Business Expenses section there's a sub-section specifically for "Legal and Professional Fees". If what you pay to the AAA is a business requirement that must be paid to operate your business or to maintain a certification, this is where it would go. Click the "More Examples" link for more information.

[Critter-3]

Personally I think this is a non deductible personal expense if it doesn't cover an auto or any business asset.  You buy this to have piece of mind incase you breakdown or use it to buy discount tickets at places like Disney or get a "trip-tick" in the olden days.   At no time do I think it is ordinary or necessary for the business to operate ... read the IRS rules in pug 535: 

What Can I Deduct?

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

Even though an expense may be ordinary and necessary, you may not be allowed to deduct the expense in the year you paid or incurred it. In some cases, you may not be allowed to deduct the expense at all.

Therefore, it is important to distinguish usual business expenses from expenses that include the following.

• The expenses used to figure cost of goods sold.

• Capital expenses.

• Personal expenses.

[DoGood]

Must the expense cover an auto or business asset to be ordinary or necessary?

In my case, cycle time to get to my tenant matters because it is necessary. I explained my real life examples in this post. Solved: Re: How to deduct Roadside Assistance premium? (intuit.com)

How does one get a definitive ruling/opinion from the IRS on the this expense? Or is it left to the tax filer?