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Can I expense car payments

Bought used vehicle for business, can I deduct what I paid for the vehicle.
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4 Replies
MiriamF
Intuit Alumni

Can I expense car payments

No, you cannot expense car payments. But you can take deductions that may be even better.

You have two choices when reporting vehicle expenses: You can report actual expenses, or you can take the Standard Mileage Rate.

If you are reporting actual expenses, when you enter asset information about your car, you list the full purchase price, not the amount you paid to date. The depreciation deduction is calculated for you, and the depreciation will, in essence be close to the amount of your car payments.

When you use Standard Mileage Rate, depreciation is built into the rate.

Whichever you choose, you are still allowed to deduct the interest you are paying on your car.

Can I expense car payments

I have received car expense payments ( not included in wages) from my employer. No taxes were deducted from this amount.How do I show this on my tax return?

 

Can I expense car payments

I was told I can not take original mileage  anymore for 2019, but must use the amount the employer paid me in reimbursement and pay taxes on that amount.

JamesG1
Employee Tax Expert

Can I expense car payments

This is my understanding of your question.

 

You use your own vehicle when working for your employer.  Your employer reimburses you and the reimbursement is not included in your taxable income on your W-2.

 

I suspect you were reimbursed for vehicle mileage under an employer accountable plan.  If the employer follows the rules of an accountable plan, the reimbursement to you would not be taxable income.

 

You will just have to ask your employer whether the reimbursements for vehicle mileage have been correctly reported to you.

 

By the way, your vehicle miles could be considered unreimbursed employee expenses for the amount between the reimbursement rate and the standard mileage rate approved by the IRS.  But unreimbursed employee expenses are no longer deductible on 2018 or 2019 tax returns.

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