How to Claim Gas & Car Repairs on Taxes

You may be able to claim vehicle-related expenses such as gasoline purchases and car repairs on your tax return, but you need to follow certain guidelines to do so. The Internal Revenue Service (IRS) reminds consumers who want to deduct vehicle-related expenses that they must familiarize themselves with the tax laws first. Individuals who want to deduct vehicle expenses on their taxes need to qualify for the deductions and possess proper documentation.

Things You'll Need

  • Receipts for gas and repairs
  • IRS Form 2106
  • IRS Form 1040
  • Proof of ownership and vehicle use

Instructions

    • 1

      Save all of your receipts. You cannot claim an expense that you cannot prove you spent money on. Save every receipt for fuel or repairs that you want to claim. You also need to document owning your vehicle and its specific use. Vehicle expenses that the IRS allows you to deduct include depreciation, lease payments, registration fees, licenses, gas, insurance, repairs, oil, garage rent, tires, tolls and parking fees.

    • 2

      Use your car for business purposes. According to the IRS, acceptable business purposes include “traveling from one work location to another within the taxpayer's tax home area,” traveling to visit customers, “attending a business meeting away from the regular workplace” and “getting from home to a temporary work place when the taxpayer has one or more regular places of work.”

    • 3

      Determine what percentage of time you use your vehicle for business. You can only claim deductions on the business usage. For example, if your expenses on your car were $4,000, and you figure that you use your car for business 75 percent of the time, then you can deduct $3,000 of your car's expenses on your taxes.

    • 4

      If you are an employee, complete tax form 2106 or 2106-EZ and itemize your deductions on your Form 1040 to claim vehicle tax deductions when filing your taxes. You cannot deduct any expenses which you were reimbursed by your employer. If you are a sole-proprietor or indedendent contractor, complete IRS Schedule C to claim automobile deductions.

Tips & Warnings

  • Keep all mileage records and expense receipts for at least seven years.
  • Improper or incorrect filing of taxes can have serious legal consequences.
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References

  • Photo Credit luxury car - model toy car image by alma_sacra from Fotolia.com

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