My company gives me a car allowance and also pays 0.48 USD per mile and taxes are taken out of this amount. Can I still deduct my gas&car payments?
2007-01-21 03:44:20 · 6 answers · asked by silversurfer_444 1 in Business & Finance ➔ Taxes ➔ United States
only if you are declaring the allowance as income
2007-01-21 03:52:29 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Yes but it may not be worth it. it seems unusual to tax the whole 48c. the tax-free amount last year was 44.5c.
What you need to do is:
1. Make sure you know how much of your allowance is being taxed.
2. Complete Form 2106 and when it asks about money re-imbursed only put down the amount that is untaxed. Compute your expenses using either the exact cost method or the mileage rate method. Exact cost only works if you have all your receipts. Deduct the untaxed re-imbursement from your expenses. What you are left with goes to the Schedule A. Unfortunately, you only get relief for any expenses that exceed 2% of your Adjusted Gross Income (the figure at the bottom of page 1 of the 1040) and you must, of course, be able to itemize.
2007-01-21 03:54:30 · answer #2 · answered by skip 6 · 0⤊ 0⤋
If the reimbursement is taxed, then yes, you can deduct business miles driven at 44.5 cents per mile, the IRS allowance for 2006. The extra 3.5 cents per mile would remain taxable, since you're getting more than the IRS allows as a mileage deduction.
This applies only to business miles, and not to miles driven commuting from your home to and from your principal place of business. If the car is driven for personal miles in addition to just business miles, you need to keep a log of ALL miles driven so you know which are deductible and which aren't.
2007-01-21 05:59:04 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
No, since you are being reimbursed for it.
If you werent, u could only deduct the portion used for work. The best calculation for that is: Work Miles Driven divided by Total Miles Driven.
Then multiply all auto expenses by that percentage.
2007-01-21 03:55:01 · answer #4 · answered by Shortie216 2 · 0⤊ 0⤋
Technically you're not supposed to. It's double dipping and strictly frowned upon You can't legally be compensated twice for it. But if you're responsible for repairs you can deduct that if you use your car for work.
2007-01-21 03:52:20 · answer #5 · answered by Jilli Bean 5 · 0⤊ 0⤋
yes if you use your car for work
2007-01-21 03:48:27 · answer #6 · answered by Kev 4 · 0⤊ 1⤋