Are car repairs tax deductible?
Car repairs are tax deductible as part of a group of car-related expenses. However, only certain individuals are eligible to claim a tax deduction related to car expenses. This includes business owners, other self-employed workers, armed forces reservists, and fee-basis government officials, who use a car for business purposes.
Want to know more about when auto repairs are tax deductible? Read on and we’ll explain everything you need to know. We’ll cover who can take the deduction and what counts as a car expense related to tax deductions. Lastly, we’ll help you determine how to claim this deduction.
Are auto repairs tax deductible? It depends on who you are.
In addition to self-employed workers there are a few other types of individuals who can write off vehicle repairs on their taxes.
- Armed forces reservists who are traveling up to 100 miles away from their home
- Qualified performing artists
- Fee-basis state or local government officials
What car expenses are allowed for a tax deduction?
If you use your vehicle for a business purpose, you’re generally allowed to deduct your expenses in one of two ways: either as a mileage deduction or by tallying up actual car expenses.
Here are typical expenses for the tax deduction using the actual car expense method:
- Car repairs
- Car insurance (tax deductible)
- Gas and oil
- Garage rent
- Lease payments (subject to the lease inclusion amount)
- Registration fees and licenses
- Tolls and parking fees
Some taxpayers choose to use the mileage deduction instead of calculating the expenses shown above. If you go that route, you’ll be able to deduct $0.655 per mile for your 2023 taxes. Find out more about the mileage deduction rules.
How to write off vehicle repairs and more on your taxes
If you use your car for personal and business use, you’ll first need to figure out how often you use it for each as only the business use will apply. To make this determination, you’ll refer to the miles you drove during the tax year and determine a prorated amount.
For example, if 60% of your miles were driven as part of your business work, then generally 60% of your actual expenses can be counted toward your deduction.
Where you report the information will depend your type of work.
- Business owners and self-employed workers will report actual car expenses on a Schedule C.
- Other individuals as listed at the top of this article will report this information on Form 2106.
Get help claiming a car expense tax deduction
Want to make sure you’re calculating your expenses and completing your forms correctly? H&R Block has the expertise to help you.
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