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Besides the per diem, is it allowed to add fuel, and maintenance costs?

Forum|Forum|6 years ago
June 1, 2019
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If drivers pay fuel and maintenance costs are these deductible

Best answer by bwa

is it allowed to add fuel, and maintenance costs?

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 but cannot add any other fuel or operating costs..
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 payments if you lease it.)

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.

(No matter which method you use, your auto expenses must be reduced by any reimbursement not otherwise reported as income.)

(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.)

Critter

If you are an employee and you are required to pay for those things by the employer then you can deduct them as employee business expenses. Just be prepared to support that position if the IRS questions it.

B

bwaAnswer

is it allowed to add fuel, and maintenance costs?

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 but cannot add any other fuel or operating costs..
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 payments if you lease it.)

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.

(No matter which method you use, your auto expenses must be reduced by any reimbursement not otherwise reported as income.)

(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.)

Critter

If the vehicle is a big rig or car that you do not own (a company vehicle) you cannot use the standard mileage rate, you must use the actual expenses option.