Can I Deduct Mileage (it's complicated)?

[DazedAndConfused]

Hello,

I am an adult, living in an extended family home arrangement. I deliver food for both Uber and DoorDash. They are my sole source of income.

At the end of 2019, my own car broke down and I cannot afford to fix or replace it. So I started driving my father's 2010 Hyundai Accent. The car is paid off.

I'm the only person who drives the car in the family. I am a named insured on the auto policy. I am not, however, titled on the car.  This car is used 95% for business used. Again, no one else drives it anymore.

Am I prohibited from deducting mileage on this vehicle for work purposes?

Thanks for any guidance.

[Mike9241]

since you don't own the vehicle you would have to use the standard mileage rate. 

[elvia_fiorella]

I agree with your answer. He doesn't own the vehicle. But I have a question. The moment he declares his taxes and he says that he is a ridesharing or food delivery man. What vehicle should he declare and what "vehicle expenses" he would have to put. Discarding the vehicle expenses that are common when one declares "actual expenses method"

[DazedAndConfused]

TurboTax is very buggy right now. I guess they weren't prepared for the new tax season. Here is the text after I entered information about the car I drive. Notice that TurboTax insists it a truck tractor. At any rate, TurboTax throws out my mileage numbers after this stage. I can only get a write-off for gasoline.

Based on your info, you'll need to enter the actual expenses for this Hyundai Accent

Since you didn’t own or lease this Hyundai Accent, the IRS requires you to enter actual expenses to get a tax break.

Since your Hyundai Accent is a truck tractor for over-the-road use, the IRS requires you to enter the actual expenses to get a tax break.

[DazedAndConfused]

This from the IRS website. I think this is dispositive:

To use the standard mileage rate, you must own or lease the car and:

• You must not operate five or more cars at the same time, as in a fleet operation,
• You must not have claimed a depreciation deduction for the car using any method other than straight-line,
• You must not have claimed a Section 179 deduction on the car,
• You must not have claimed the special depreciation allowance on the car, and
• You must not have claimed actual expenses after 1997 for a car you lease.

[Opus 17]

Because you do not on the vehicle, you cannot use the standard mileage rate. The standard mileage rate includes an allowance for depreciation, which you can only take if you are the owner.  You must use the actual expense method.

to use the actual expense method, you must have a mileage diary or log that shows all of your business use, including the date, mileage driven, and business purpose. The delivery apps you use may provide this information for you, although you can also provide this information yourself by keeping a paper diary in the car or using a dedicated mileage tracking app.  You also must know the total mileage driven buy the vehicle for the year so that you can determine the percentage of the total vehicle use that was for your business.

Then, you must also have the total vehicle expense for the year. This includes expenses that you actually pay for, such as gas, oil changes, other repairs, and insurance. Don’t include any expense that someone else pays for. You can deduct the percentage of total vehicle costs equal to the percentage of business use.

It’s not as simple as just deducting the gas you pay for, unless you can prove to the IRS that the vehicle is never driven for any personal reason, or you can show that you fill the car up with gas every evening before you start work and again after you finish work and are only deducting the gas you used on the business trips.  Because under normal circumstances, were you fill the tank up once or twice a week, some of that gas is certainly going towards personal expenses and that is not allowed and he must have some way of tracking the difference.

[DazedAndConfused]

Thanks for the very helpful reply. Going by what you have advised, I'm golden. I keep meticulous mileage records, gas receipts, etc. 

Thank you!