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New Member
posted Jun 5, 2019 2:32:35 PM

Can I write off the extended warranty I purchased for a vehicle used for business?

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8 Replies
Alumni
Jun 5, 2019 2:33:04 PM

Yes, if you use actual costs.  No if you use the mileage method, as it is already included.

New Member
Jun 5, 2019 2:33:06 PM

Thank you for your response! What would this go under if I do the actual costs? Would it go under other expenses? It is not listed as their examples. Thank you for your help.

Alumni
Jun 5, 2019 2:33:07 PM

I would add it to the cost of the auto for depreciation, as that is the most correct way.  Otherwise, use other expenses because (as you note) it's not listed elsewhere.

New Member
Jun 5, 2019 2:33:08 PM

Can you elaborate more how to add it to the cost of auto depreciation. Maybe give us an example or screen shot? Thank you.

New Member
Apr 3, 2023 3:05:58 PM

I file a schedule C. I have taken actual cost thru 5 years on the vehicle and just purchased an extended warrarty for 3 years. Can I deduct that?

Expert Alumni
Apr 3, 2023 3:47:30 PM

Yes.

You enter the amount of that expense and the program will allocate the portion attributed as Business use (if the vehicle is less than 100% used for business) 

 

More Info

New Member
Jul 24, 2023 2:21:10 PM

Since the question is for a separate 3 year warranty, is it considered a prepaid - subject to amortization over 3 years or is it a period expense, since there is no certainty that any claims will ever be made under the warranty?  I have found a lot of information about the tax reporting by the issuer of the warranty/service contract, but little guidance on the tax treatment for the buyer.  What guidance I have found is pretty much evenly split between a prepaid or a period expense.  Don't you love income taxes?

 

Thanks in advance.

 

Level 15
Jul 24, 2023 6:16:31 PM

It would be amortized over 3 years.  The fact there is no certainty that claims will ever by made does not change that.