Tax Year Prior to 2020: If I purchased a used vehicle for work as a rural mail carrier can I deduct the cost of the vehicle?

[Knight0131]

This answer is wrong. I am a rural carrier and also have an undergraduate in accounting. Rural Carriers EMA is considered allowable expenses under a qualified plan (this is Union negotiations in 1991). New tax regulations in 2018 Allow Rural Mail Carriers expenses in EXCESS of EMA reimbursement  ARE deductible on Schedule A

Rural Mail Carriers are NOT and have never been able to take a standard mileage deduction.

[VictorW9]

Yes, you can deduct only a portion of the cost of the vehicle. Apart from the normal expenses of operating the vehicle, you can still deduct the cost vehicle by taking an amount as depreciation over the life of the vehicle.

[ds557]

maybe i am asking the wrong question.  how do i go about claiming a used vehicle i bought for delivering mail?  if i depreciate it do i claim that depreciation each year or just one time? an how long and what percentage can i claim?

[Cynthiad66]

For new and pre-owned vehicles put into use in 2020 (assuming the vehicle was used 100% for business):

• The maximum first-year depreciation write-off is $10,100, plus up to an additional $8,000 in bonus depreciation.
• For SUVs with loaded vehicle weights over 6,000 pounds, but no more than 14,000 pounds, 100% of the cost can be expensed using bonus depreciation.

Use this link for more information:  Business Use of Vehicles

Percentage you claim is the percentage of use.  If you bought this vehicle specifically for mail delivery and no personal use then....100%.  Except for commuting to work.

[DoubleLL]

Where is this 100% deduction applied for a rural route carrier?  As a job related expense or as a business expense?

[KrisD15]

Rural Carriers are employees, not sub-contractors, therefore not Self-Employed. 

Rural Carriers are paid a "Qualified Reimbursement" for the use of their vehicles and that amount is NOT included in Box 1 of their W-2, therefore it is not taxed. 

Pre-tax income cannot be deducted. 

If you are not Self-Employed, you cannot depreciate a vehicle. 

According to the IRS:

“…If you were a rural mail carrier, you can treat the amount of qualified reimbursement you received as the amount of your allowable expense. Because the qualified reimbursement is treated as paid under an accountable plan, your employer shouldn't include the amount of reimbursement in your income. You were a rural mail carrier if you were an employee of the United States Postal Service (USPS) who performed services involving the collection and delivery of mail on a rural route. Qualified reimbursements. These are the amounts paid by the USPS as an equipment maintenance allowance under a collective bargaining agreement between the USPS and the National Rural Letter Carriers' Association, but only if such amounts don't exceed the amount that would have been paid under the 1991 collective bargaining agreement (adjusted for changes in the Consumer Price Index since 1991 as detailed in section 162(o)(3)). If you were a rural mail carrier, do not use Form 2106. Your employer should not include the amount of reimbursement in your income.”

[DoubleLL]

Thank you for the response.  I am trying assess whether Section 179 deduction would allow a vehicle purchased 100% for rural mail delivery in 2022 to be fully expensed the first year.  Some community responses and IRS pub seem to say yes, while others make it less clear.   If available, I am trying to determine how to enter this into Turbotax.

[MonikaK1]

As KrisD15 noted above, rural mail carriers are a unique category of employee, not self-employed. The IRS instructions for Form 2106, Employee Business Expenses, state "If you were a rural mail carrier, do not use Form 2106. Your employer should not include the amount of reimbursement in your income." 

As an employee, under current law, you may not claim employee business expenses on your Federal return. You can only exclude your expenses up to the amount of reimbursement received under an accountable plan and in your case, the employer should not include the amount of reimbursement in your income.