You
can claim deductible business auto/truck expenses in one of two ways.
- IRS
Mileage Rate: You can claim
business miles times the IRS mileage rate. IRS mileage rates for business
activities are $0.56/mile in 2014 and $.575/mile in 2015. You can add
parking and tolls to the mileage rate.
- Actual
Cost: You can claim your actual costs including depreciation times the
percentage that you use your car for business. Actual costs would include
gas, oil, insurance, repairs, etc. Payments on a note would not be
deductible. The cost of the vehicle would be deducted through depreciation
instead (or lease payments if you lease it.)
Where
to Deduct:
- If you are
an employee, they are a miscellaneous itemized deduction. Miscellaneous
itemized deductions are only available if you qualify to itemize and only
to the extent that they exceed 2% of your Adjusted Gross Income.
Example: If your Adjusted Gross
Income is $50,000, only miscellaneous itemized deductions over $1,000 are
deductible. Because of this, many items deductible as miscellaneous
itemized deductions have no tax value because the taxpayer doesn't
itemize, or because they are lost in the 2% of adjusted gross income
limitation.
- If you are
self-employed, these expenses would be business expenses on Schedule C.
