The answer to your question is yes, and no but for certain situations. Read on to find out what the special conditions are to be eligible for an auto tax benefit.
At the end of the day, every penny saved is every penny earned. So it is very much your right to know whether car maintenance costs are covered under tax deductions. We will clarify that by the end of this article.
Typically, first, you need to figure out how the costs were incurred. If you were driving for business purposes.Generally, you can subtract the standard vehicle expenses excluding those amounts which come under car repair credit.
On the other hand, if you used your car for as an official or for business purpose, you are usually allowed to deduct the vehicle expenses that you haven’t reimbursed. To figure out exactly what car repairs are tax deductible you will have to use one of the following methods:
1.) Standard mileage rate:
This is calculated at a rate of $0.54 per mile as per the latest charges. If you use the standard mileage rate, you can’t deduct car repairs as a separate item. A portion of the standard rate already accounts for vehicle repair.
2.) The actual vehicle expenses that you incurred:
To arrive at the final amount that can be deducted, divide the vehicle expenses between your personal use of the car and your business use of the car based on the miles you drove for each.
These have to be reported accordingly. Report these expenses on a Schedule C if you are self-employed or on Form 2106 if you’re an employee.
List of car repairs and other general car essentials that can be tax deductible
- Lease payments
- Maintenance and repairs (e.g. oil change, tire replacement, rotation and balance, wheel alignment, brake flush, coolant flush, transmission fluid serviceetc.)
- Vehicle registration