Expenses on vehicle I don't own or rent

[Tour guide Tom]

Where do I post expenses on vehicle I don't own or rent? I am driver who uses a company vehicle I do not own or rent for, but I do fuel it. I am not reimbursed for the fuel.

[Vanessa A]

If you are an employee, you do not enter these expenses anywhere on the federal return, as employee job related expenses are not deductible on your federal return.  State rules vary so it may be deductible on your state return as an employee.  If it is, as you walk through the questions for the state return, you will come to a question asking you about job related expenses.

If you are an independent contractor (1099-NEC), then you would enter this as a business expense as a vehicle expense.  After you enter your business income from the 1099-NEC, it will take you to the expense section.  Here you will enter the vehicle information and that you do NOT own it.  After you continue through you will be able to enter your gas expenses for the company vehicle that you drive and put fuel in.  Do not try to take the standard deduction as that does not apply to you.  You will be able to enter parking fees and car washes or any other vehicle related expenses that you do not get reimbursed for as well.

Where do I enter my Self-employment Expenses

[Tour guide Tom]

Thank you. If I remember correctly, following that procedure will require me to enter a specific vehicle's information (like vehicle make, model, lic). As an independent contractor, I use a variety of vehicles provided from a fleet. Do I have to keep track of those expenses per individual vehicle, or can I lump them together as a Other business expenses?

[DawnC]

Because you do not own the vehicle, you cannot use the standard mileage rate, and yes, you must keep track of them.   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.

It is important to keep complete records to substantiate items reported on a tax return.  In the case of car and truck expenses, the types of records required depend on whether the taxpayer claims the standard mileage rate or actual expenses.  For actual expenses, a mileage log helps establish business use percentage. Taxpayers should also retain receipts, invoices and other documentation to show cost and establish the identity of the vehicle for which the expense was incurred.  

• Actual expense method (eligible expenses include depreciation, lease payments, registration fees, licenses, gas, insurance, repairs, oil, and tires)

Note: Other car expenses for parking fees and tolls attributable to business use are separately deductible, whether you use the standard mileage rate or actual expenses.

It’s important to track your mileage. If you’re audited, you may need to show a log of the miles you drove.    Where do I enter actual vehicle expenses?