How to: Tax Deduction for a Car Repair

Car repair expenses can be deducted from business income taxes.

Car repairs can be deducted on your income taxes if the vehicle was used for business purposes during the year. Each year the Internal Revenue Service (IRS) designates how much the per-mile deduction will be. If the total of the expenses for the vehicle is more than the amount of the mileage deduction then the actual expenses should be used as the deduction. Generally the mileage allowance is the larger deduction. Keeping thorough records for automotive expenses is of utmost importance to calculate these deductions.

Things You'll Need

• Automotive expense records
• IRS 1040, Schedule C

Instructions

1. Calculate the total number of business miles driven during the year. Multiply this figure by the current IRS mileage allowance.

2. Determine the total amount of all actual automotive expenses for the year. Include all purchases for gas, oil and maintenance. Repairs and any other expenses should be included also.

3. Compare the total of the mileage allowance with the total of the actual expenses and use the larger dollar figure as your deduction for that year.

4. Enter this information on Line 9 of the IRS 1040, Schedule C, Profit or Loss from Business form and file it with your tax return.

Tips & Warnings

• Keep all receipts for automotive business expenses for at least three years.

References

• IRS: Business Expenses

Resources

• IRS: Tax Return Forms and Publications