Open TurboTax

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
Your taxes, your way. Get expert help or do it yourself. >> Get started
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

cancel
Showing results for 
Search instead for 
Did you mean: 
TJD1999
Returning Member

Car Modification Based YouTube Channel

Can a car modification-based YouTube channel deduct car parts/repairs/modifications that are made on camera?

 

This is in reference to this post , they said you cannot deduct car parts/repairs if they're for personal use. Whereas if the repairs are on camera and posted to YouTube, wouldn't that count under a business expense? 

2 Replies
Opus 17
Level 15

Car Modification Based YouTube Channel

The rules regarding how to deduct expenses and how much expenses you can deduct, when you have a personally owned vehicle that is also used for business, are spelled out in chapter 4 of IRS publication 463, and are based purely on mileage driven for each purpose.

https://www.irs.gov/pub/irs-pdf/p463.pdf

 

The basic tax principle is that anytime you have an expense that is of mixed business and personal use you must have a reasonable way to allocate a portion of that expense to the business, and for personally owned vehicles, the IRS regulations are based on mileage.  That means that if you have a personally owned vehicle that you drive 10,000 miles a year, and 100 miles per year are used in the making of the video or testing purposes, then you can deduct 1% of your vehicle expenses and that includes repairs and maintenance.

 

I would consider it possible that if you installed components to make a video and then removed them so that they were no longer part of your vehicle, you could make the argument that 100% of the cost of the components could be allocated to the business, since the components were never used for personal use.  Components that remain on the vehicle, and that become part of your personal use of the vehicle, could never be written off 100% as a business expense. The IRS regulations clearly focus on mileage as the proper method of allocating the expenses.

 

More expert advice from your own tax professional might be advisable.  

 

[Edited to add]

You certainly must be reporting your YT income as a schedule C business, rather than a hobby, before you can deduct 1 cent of expenses.  Assuming this is a schedule C business, the rules for deducting vehicle expenses are as I described. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
rjs
Level 15
Level 15

Car Modification Based YouTube Channel


@TJD1999 wrote:

if the repairs are on camera and posted to YouTube, wouldn't that count under a business expense? 


Is the YouTube channel a business? Are you operating it as a business and making a profit from it, or at least making a business-like attempt to make a profit? If it's not a profit-making business, the IRS considers it a hobby, and you cannot deduct any of the expenses.

 

About Community

Learn about taxes, budgeting, saving, borrowing, reducing debt, investing, and planning for retirement.

3.49m
Members

2.62m
Discussions

Manage cookies
v