Yes. You can deduct repairs to your vehicle, if you use it for work purposes. If the use of the car is for business/work purposes, you can use the actual method to claim your vehicle expenses.
First, here is what's considered deductible mileage:
- Your trip between your home and your regular or main job is never deductible.
- A trip between your home and temporary work location is deductible if your main job is at another location.
- Your commute between home and second job is never deductible on a day off from your main job.
- Your trip between your regular job and temporary job is always deductible.
- Your trips between your main and second job are deductible.
- Your trips between temporary work locations and a second job.
Here are some of the items you can include in your deduction:
- A portion of your lease payment (if you are leasing your vehicle)
- Auto loan interest (if you’re financing the purchase of your vehicle)
- Auto Insurance
- Maintenance and Repairs (like oil changes, new tires, replacing brake pads, etc.)
- Depreciation
Example You drove 10,000 miles in the year 2017, and 5,000 of those miles were for business. Here’s how you would break down your deductions using the Actual Expenses method:
- Gas: $1,000
- Insurance: $1,500
- Repairs: $400
- Lease Payments: $6,000
- Oil: $100
- Car Wash: $500
These figures total to $9,500 in car-related expenses. Since you used your car for business purposes 50% of the time, you would multiply your total expenses by 50% to get your actual deduction, which comes out to $4,750.
If you use these same figures to calculate your reimbursement using the Standard Mileage method, you would multiply your business mileage (5,000 miles) by the standard mileage rate (53.5 cents per mile for 2017), which comes out to $2,675.
This would leave you with a net savings of $2,075 ($4,750-$2,675) by using the Actual Expenses method for the deduction.
Whether to use the standard mileage rate or actual costs is a numbers game. Generally, the more economical the vehicle is to operate, the more likely it is that the standard mileage rate will give you the bigger deduction. Conversely, the higher the operating costs, e.g., gas, repairs, tires, etc. the more beneficial the actual cost method is likely to be.
Of course, your mileage may vary, but TurboTax will allow you to easily determine whether this is a good strategy for you.
