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Can Car Repairs Be Tax Deductible?

Getting in and out of Harrisburg means getting creative with commuting options. There are plenty of options including a combination of public transportation as well as walking and biking. Those with a car can drive and potentially write off automotive repairs.

To see if these options are available to you, you will need to ask a few questions.

Is your car a business vehicle?

If you use a car, SUV, or pickup to get between two business destinations, you may be able to list it as a business vehicle. A business destination could be your office or some other regular business location, such as your client’s location, onsite jobs or inventory supply sources. If you aren’t sure what other locations can apply, you will need to speak with a certified tax attorney.

It should be noted that getting to your office from your home, does not make your vehicle a business vehicle. Nor do working vehicles like moving vans and dump trucks.

What repairs are tax deductible?

A far as the IRS is concerned, repair work is that which keeps your vehicles functional and working properly, not stuff that improves its performance or extends its life span. So you may be able to deduct the costs of an alternator replacement or radiator repair, but your will not be able to discount the cost of installing a rear-view camera or a new engine.

Furthermore, repairs are only deductible from the year they were made. So if you had your repairs made in 2019, you will not be able to get them reimbursed in your 2020 taxes.

There are two different ways that a taxpayer can seek a tax break for their repairs. These are the standard mileage rates and vehicle expenses.

The standard mile rate is the easiest method. Using this method, your entire yearly deductible will be figured with one easy calculations: 53.5 cents for each mile driven in tax year 2019. A portion of this cash will be for all necessary repair work, so you won’t be able to expense them differently.

How to choose the right method for you.

As a rule, the lower your vehicle expenses are the better your chances of getting higher tax break with the standard mileage rate. But, if you have a car with especially high expenses, you may get a better deal by using the actual business expenses method.

Keeping Detailed Records

In order to get the most from your tax deductions, you will want to keep detailed records of anything you hope to deduct. If you hope to take advantage of the tax deductions for auto repairs you could save a lot of money, but all this will depend on the records you keep.

If you hope to be using the standard mileage rate, you will need to provide detailed information on ownership and usage. A daily log of miles traveled will be a considerable boost to your chances of deductibles.

For the actual car expenses, you will need to keep a mileage record as well. You will also need the receipts and all other paperwork for the repairs you have made and your ownership of the vehicle. As with anything related to taxes, your capacity to keep careful records will be your key to victory. Leahy’s Auto can help you with any additional info you may need. Give us a call as soon as possible.

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