Can Vehicle Expenses Be Claimed on Taxes?

Most people cannot use vehicle expenses as a tax deduction.

Generally, vehicle expenses cannot be claimed as a tax deduction, but there are a few exceptions primarily relating to personal property tax and your job. For most, it is necessary to keep a detailed mileage log.

Property Tax

If you itemize deductions, the personal property taxes on your car are deductible. These are sometimes called registration fees.

Non-Reimbursed Employee Use

If your employer requires you to have transportation and does not reimburse the cost of that transportation, then the expenses you incur from using your vehicle are deductible.

Business Expense

If you are self-employed and using your vehicle in the operation of your business, you can deduct the expenses from the vehicle, but only the expenses incurred for the business.

Looking for Work

Vehicle expenses incurred while looking for a new job in your current field are also deductible.

Moving for Work

If you have relocated due to a new job and the distance between your old home and new job is more than 50 miles, you can deduct the vehicle expenses incurred from the move. Keep a mileage log and a record of any other expenses that may arise.

References

• IRS: 1040 Instructions
• IRS: Instructions for Schedule C
• IRS: Instructions for Schedule A

Resources

• IRS: Publication 529
• Financial Web: Tax Tips: Standard Mileage or Actual Vehicle Expenses?