Self Employed Dependent Deductions

[Jeff_45]

I have a self-employed dependent that received a 1099-NEC.  It appears that vehicle expenses can be deducted; however, I cover all cost to maintain and operate the vehicle.  Since I cover all costs, can he deduct a portion (business miles / total miles) of those cost on his return? Or are those cost considered "recovered" from his perspective?

[AnnetteB6]

One of the requirements for being able to claim vehicle expenses on Schedule C for self-employment is that the taxpayer must own or lease the vehicle.  If you are the one that owns or leases the vehicle, then the mileage cannot be claimed on your dependent's tax return.

[Jeff_45]

Thanks.  That is what I would think is the case but working through TurboTax it indicated that expenses could still be claimed even if the vehicle was not owned by the self-employed person, indicating that the only restriction was the standard mile reimbursement rate could not be used.

[DaveF1006]

Yes, he can claim out of pocket expenses for operating the vehicle. Please review this Turbo Tax post for more details.

@Jeff-45

[Jeff_45]

Thank you.