One of the most common questions I get every day from clients is about Auto Expenses – can we deduct them? How much can we deduct?
Well, if you use your vehicle for business purposes then yes, you can deduct these expenses. You have a choice, you can either deduct the standard mileage rate per business mile (currently 62.5cents) OR actual car expenses. WHich is the best strategy for you? This is something to discuss with your tax advisor because the answer is, “it depends”. You will find an Auto Expense Worksheet at our website.
When you drive from your home to your office, this is considered commuting and is NOT deductible. No matter how far the distance, commuting expenses are not deductible. This also includes Parking. If the trip is non deductible then the parking at the work location is not deductible. For gig workers like Uber/Lyft drivers who don’t have regular work locations, the IRS has said that their first stop and last stop of the day are not deductible and considered commuting expenses.
If you work from home and your home is your primary office, then you have no commuting miles. This expands your auto expense deduction. Another huge benefit to a home office!
Interesting and complicated stuff. Please do make sure you get professional advice to avoid issues with the IRS in the area of Auto Expense Deductions.
You can reach out to us anytime at https://wendybarlin.com/ and don’t forget our Business Travel tax deduction workshop THIS THURSDAY at noon EST. Find more tax deductions in your summer travel expenses! Sign up for our travel expense tax deduction workshop here.