Tax-deducting business expenses.?

Question

I work as a field tech for a bank. This means that I have to do a lot (300+ miles/wk) of driving. Since I have a large area to cover, I was thinking about getting an in-car GPS like Tom-Tom. I talked to a friend about this, and he said that when I get my taxes done, I should deduct it as a business expense. Can I do that?

Also, could I continue to deduct the cost of the subscription for years after the initial purchase?

Last, I have to use my own car. I am reimbursed for mileage, but since 90% of my mileage comes from work, can I deduct the cost of oil changes, repairs, and maintenance?

Thanks in advance

Answer 1

You can either deduct actual expenses or a flat mileage rate. Both must be reduced by your employer's reimbursements. Either way you must keep accurate written records of expenses and these records must be completed at the time the expenses (or miles driven) are incurred.

Keep in mind that you cannot deduct commuting costs. The first trip from home in the morning and the last trip back home in the evening cannot be deducted regardless of how far the journey is! Tax tip: If your office is near your home, ALWAYS stop at the office first and check in; and check in at the office again before you go home! If you go straight from home to a site 300 miles away, those 300 miles are considered non-deductible commuting miles. Ditto for the trip back home if you don't stop at the office first.

If you deduct actual expenses, you must track ALL expenditures for your car for the entire year. Your allowable deduction is whatever the business use percentage is based on the total miles driven for the year vs the business miles driven.

If your employer reimburses you at the IRS rate, currently 44.5 cents per mile, the IRS considers it a wash. You don't need to keep any records or claim any expenses. If you turn a profit, it's yours to keep but you don't deduct any losses either. Any deduction that you might accumulate probably isn't worth the record keeping hassle in that case. What's more, unless you itemize, you can't claim any employee business expenses at all.

The GPS is a grey area. I'd probably go for it, but be prepared to lose it if you're audited.

Answer 2

You can do this. I have a small business and the tax breaks are awesome. You can write off at least part if not all of your subscription. I was told that as long as I have a second car that I use for a family car....my primary one could be written off as a business vehicle.....in which case all maintenance, repairs, and even car washes can be deducted.

Answer 3

"...can I deduct the cost of oil changes, repairs, and maintenance?...."

No, that is included in the mileage reimbursement.

If you can prove that the GPS is for the "Convenience of your employer" and not your convenience, you should be be able to deduct it.

Keep in mind that unreimbursed employee expenses are an intemized deduction subject to 2% of your income. There are two hurdles to get over just to get a tax benefit.

Answer 4

Which country?