Rules for Auto & Truck Expenses on a Schedule C

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A female mechanic is working on a vehicle.
A female mechanic is working on a vehicle. (Image: Jose Luis Pelaez Inc/Blend Images/Getty Images)

If you're on the road for work, you have some tax-deductible auto and truck expenses. There's more than one way to figure this deduction and more than one expense that can go into this category. Study the rules carefully before turning to Schedule C, as the Internal Revenue Service may respond to your improper deductions with an audit -- or a bill for unpaid taxes.

The All-Inclusive Line 9

Deduct car and truck expenses on Line 9 of Schedule C. You can use this line if you're a business, an independent contractor or a statutory employee who can deduct his job-related costs. When you figure this deduction, your first decision is whether to write off actual expenses or use the standard deduction. The latter is always easier, as it simply comes down to a mileage allowance, which reached 56 cents per mile for tax year 2014. With the standard deduction, all you need to keep track of is mileage.

Deductible Expenses

If you deduct actual expenses, you can add up the costs of gas and oil, repairs, lease and rental fees, parking fees, tolls, license and registration fees, insurance premiums and depreciation. If you lease and don't own the vehicle, you can deduct the lease payments. The IRS requires you to calculate the percentage of business and personal use. If you drive half the mileage for business purposes, for example, you can only deduct half of the total expenses. You may not allocate an expense specifically to one or the other purpose. And if you commute to work to a single destination, you can't deduct the vehicle expenses at all.

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