MY wife is paid 50 cents per business mile for use of her car. Can we claim any tax deduction for milage?
April 30th, 2010If the employeer pays milage, is there a tax deduction for the depreciation of the car? Milage only covers a small part of the cost of operating the car for use in the business.
Replys
Yes, you can claim a deduction, but you will need to calculate the actual cost of the mileage, and then subtract the $.50/mile you’ve already received. The remainder goes on Form 2106, which flows through as a Miscellaneous (Subject to 2% floor) deduction on Schedule A.
Technically, there may be a deduction here. As a practical matter, I bet it turns out to have no impact or minimal impact on your return. You’ll have a hard time establishing cost per mile beyond the $.50 unless you’re in a special circumstance (very expensive repairs to vehicle, very bad gas mileage) AND you have kept good records re the cost of maintaining/operating the vehicle.
Autos are also subject to limits on depreciation – it doesn’t matter if you’re driving a $100,000 car, the IRS will only let you depreciate the value of what they consider a reasonable car. The remaining cost is considered a luxury you choose to buy for personal reasons, and is not deductible.
Nope. That is what the mileage is for. That covers your gas and wear and tear on the car.
Unless you get 6 miles to the gallon, you are getting much more than just gas money.
The Irs allows a .48cent/mile deduction. So, .50cents from the employer its pretty good. If your wife uses her vehicle for business, she may be able to get a deduction for the depreciation of the vehicle too. The only thing with depreciating a vehicle, when she sells it, she will need to recapture the depreciation on the vehicle.
Flat rate mileage includes depreciation, and all other car expenses. Even at today’s gas prices, you don’t pay 50.5 cents a mile for gasoline!
If you can claim mileage, you have the choice of basing in on actual expenses, or the flat rate. If she is reimbursed 50 cents a mile, you could only deduct 1/2 cent per mile flat rate since the IRS rate for 2008 is 50.5 cents – for 2007, leave it alone since the IRS rate was 48.5 cents. If you take actual expenses, you’d have to deduct from you expenses whatever amount you were reimbursed.
Whether or not the flat rate covers the costs depends on what you drive.
She is receiving more than the IRS allowance of 48.5 cents a mile. You’d have to have a pretty horrible car to have expenses greater than that amount.
that 50 cents is supposed to cover everything except tolls and parking – it covers gas, oil changes, repairs and depreciation – if 50 cents per mile only covers your cost of gas, you need a new car
I would agree with everyone else here. The IRS already allows a
deduction for mileage and what your wife is getting is generous compared to most employers. You cannot claim an additional deduction for depreciation or mileage, but she can save receipts for any tolls and parking.
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