Beginning in tax year 2018, you cannot claim auto expenses on form 2106 unless you are an Armed Forces reservist, qualified performing artist, fee-basis state or local government employee or employee with impairment-related work expenses.
For tax years 2017 and prior:
You may compute vehicle expenses using one of two methods:
- the standard mileage rate
- the actual expense method
You, however, cannot claim actual expenses and also deduct the standard mileage rate. You must choose one or the other if you qualify for both.
Standard Mileage Rate: The standard mileage rate is a general, per-mile rate that the IRS allows to calculate your deduction. In figuring this amount, the IRS takes into consideration all the costs of operating a vehicle, such as: gas, oil, repairs, insurance, tires, etc. You can use the standard mileage rate only if:
- you owned the vehicle and used the standard mileage rate for the first year the vehicle was placed in service, or
- the vehicle is leased and you are using the standard mileage rate for the entire period of the lease.
If you previously used the standard mileage rate for a leased vehicle, then you will not be able to deduct actual expenses for that vehicle.
Actual Expenses: You can deduct as actual expenses any of the following:
- License plates
- Lease or rental payments if you leased or rented a vehicle instead of using your own vehicle.
- Garage rent
- Parking fees
- Registration fees
DO NOT INCLUDE interest expense you paid or state and local personal property taxes on Form 2106. Only the personal property taxes may be eligible for deduction. If so, these should be deducted in the "Taxes You Paid" section of your itemized deductions.
If you did have any qualifying unreimbursed employee vehicle expenses during the tax year, you can enter these under:
- Federal Section
- Enter Myself
- Itemized Deductions
- Job Related Travel Expenses (Form 2106)
For further information on vehicle expenses click here
To view mileage rates click here