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Can business expenses be deducted even if not actually paid by the self-employed individual?

Got an interesting one here: a delivery driver for Doordash is using the "actual expenses" method for determining deductible expenses because he was using a car owned by his family for this work, but he wasn't the actual owner of the car - therefore the standard mileage deduction could not be used.

 

Question is this: there were a number of expenses on the car such as repairs, maintenance and fuel costs which are known and accounted for in 2020.  The driver knows the miles driven for the work versus total miles driven for the year, thereby determining a percentage of these expenses that can be deducted for the business.  The wrinkle is in many/most cases, the actual payment for the repairs and such were made by the family and not by the driver/sole proprietor.  Does that matter?  Meaning the business portion of the expenses can easily be determined and were incurred as part of the business operation, but if the driver/sole proprietor didn't actually pay for the expenses incurred, does it mean he cannot then deduct the business portion?  Or since the business expense portion is known, it's irrelevant if the sole proprietor paid the total expense?  

 

Thank you in advance.

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1 Reply
ee-ea
Level 15

Can business expenses be deducted even if not actually paid by the self-employed individual?

If the driver/sole proprietor didn't actually pay for the expenses incurred, it means he can not  deduct the expense.

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