Was this a car you were using for business or personal use?
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:
Here are some of the items you can include in your deduction:
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:
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.
TurboTaxMichaelDC, I cannot seem to find any menu option to itemize deductions in order to do this? where is the button/toolbar for it on the site?
OK, you'll have to move up to TurboTax Deluxe. As expensive as the new engine was, you'd have to have a significant portion of your total miles used for work (besides commuting which doesn't count). And then, you'd have to probably itemize (claiming a house, mortgage, state income tax and donations) to be more than your regular, standard deduction.
Form 2106 (Employee Business Expenses) is used for employees' unreimbursed travel, meal, entertainment, and transportation expenses (including DOT per diem). Form 2106-EZ is a simplified version.
Tip: In most cases, the IRS won't let employees deduct commuting costs. More info
Here's where to enter your job-related expenses:
Open (continue) your return in TurboTax if it's not already open.
Online versions: Make sure you've selected the Take me to my return button.
In TurboTax, search for 2106 and then select the "Jump to" link in the search results.
At the Tell us about the occupation you have expenses for screen, enter your occupation, then select Continue.
If you land on the Job-Related Expenses Summary screen, you can select Add Another Occupation (to add another 2106), Edit (for an existing 2106), or Delete.
So you're telling me I have to upgrade (as in pay more) for turbotax deluxe in order to do an itemized deduction?
Yes, you can try it out, see if it makes a difference in saving taxes and downgrade (clear & start over) if it doesn't. Depending on the answers to my "itemizing" comment above, it might not be worth the effort.
Turbotax military free... unless you want to utilize a basic tax function like itemizing deductions....