Car Insurance: If deductible, you wouldn't just deduct the insurance. You can claim deductible business auto/truck expenses in one of two ways.
- IRS Mileage Rate: You can claim business miles times the IRS mileage rate. IRS mileage rates for business activities are $0.56/mile in 2014 and $.575/mile in 2015. You can add parking and tolls to the mileage rate.
- Actual Cost: You can claim your actual costs including depreciation times the percentage that you use your car for business. Actual costs would include gas, oil, insurance, repairs, etc. Payments on a note would not be deductible. The cost of the vehicle would be deducted through depreciation instead (or lease deducting lease payments if you lease it.)
(For planning purposes, the mileage rates go down in 2016 to $0.54 for business use, and $0.19 for medical and moving purposes. The charitable rate stays the same.)
Where to Deduct:
- If you are an employee, they are a miscellaneous itemized deduction. Miscellaneous itemized deductions are only available if you qualify to itemize and only to the extent that they exceed 2% of your Adjusted Gross Income. Example: If your Adjusted Gross Income is $50,000, only miscellaneous itemized deductions over $1,000 are deductible. Because of this, many items deductible as miscellaneous itemized deductions have no tax value because the taxpayer doesn't itemize, or because they are lost in the 2% of adjusted gross income limitation.
- If you are self-employed, these expenses would be business expenses on Schedule C.
Cell Phone: The costs of a cell phone may be a business expense, but only the additional costs in using a cell phone for business are deductible. The Tax Court has several interesting cases on this. In one case, the taxpayer paid a flat rate on a phone used for business and personal calls. The court held that as he paid a flat rate for his personal phone and incurred no additional charges for business use, he has no deduction. (Ritchie, TC Summary Opinion 2005-181).
For an employee, if deductible, they would be entered as a miscellaneous itemized deduction for employee business expenses.
Example from Ritchie: "Petitioner’s cell phone was a personal phone that he also used for business calls. Petitioner testified that he paid a flat rate, regardless of phone usage. Therefore, aside from the personal expense of the phone, which is rendered nondeductible under § 262, he incurred no additional charge for business use."
No. And the prior posts were from many years ago and do not apply anymore. Employee job expenses are no longer deductible.
You can never deduct the whole payment. If you have a business you can depreciate the cost.
@Davy_dawg You are posting to a VERY old thread that has outdated information. If you are a W-2 employee you cannot deduct any job-related expenses on your federal tax return.
Sorry---W-2 employees cannot deduct job-related expenses on a federal return. Job-related expenses were eliminated as a federal deduction for W-2 employees by the tax laws that changed for 2018 and beyond. Your state tax laws might be different in AL, AR, CA, HI, MN, NY or PA.
If you are self-employed you can enter expenses for your vehicle on your Schedule C with your other business expenses.
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