Can I claim car payment for business?

[inahurry4]

I started using my vehicle for all business dec 2014, so claiming vehicle in 2015.  Can I claim the car payment?

[bwa · Accepted solution]

You cannot claim a car payment.

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.

(No matter which method you use, your auto expenses must be reduced by any reimbursement not otherwise reported as income.)

[BobRoyAce]

Thanks for the response. The following video seems to indicate that there is a way to claim things, though. It's only a few minutes long. Would you mind watching it and letting me know what you think?

https://www.youtube.com/watch?v=Ce-xd007kkc

[BobRoyAce]

After speaking with a couple of local CPAs, I determined that the full purchase price could be deducted under Section 179...associated with the Schedule C, for the business.

[Cynthiad66]

Section 179 is a provision of the US tax code that allows businesses to deduct (i.e., write off) the purchase price of qualifying equipment, vehicles, and software in the year it was purchased, as opposed to depreciating it a little at a time over several years.

Generally speaking, the Section 179 tax deduction applies to passenger vehicles, heavy SUVs, trucks, and vans used at least 50% of the time for business-related purposes.

You claim the Section 179 deduction on Part I of Form 4562. You'll have to include a description of the property, its cost, and the amount of Section 179 you're claiming for that asset on Line 6. If you need more room, you can attach a list to Form 4562.

How to Depreciate  Property