I use my personal car for work and I keep track of the miles. Can I deduct gas and maintenance expenses or am I only allowed to deduct mileage? Can I use the percentage of miles used for work as a general proportion to apply to all my vehicle expenses. I'm self employed.

ANSWER

The BIDaWIZ Team's Answer:

Normally, the IRS prohibits taxpayers that work for someone else from deducting commuting expenses (i.e. travel from their home to their place of business). However, travel expenses from their office to a client site that aren't reimbursed by the employer are deductible and reported on Schedule A as a miscellaneous expense. The rules are more lenient for self-employed taxpayers that work from home as appears to be your case. To meet the home office requirement, your home must be used primarily for business activities or for marketing or administrative functions such as accounting, strategic planning or for preparing reports. When you travel to another location to host a meeting or even to go to your bank, those expenses would be deductible. When traveling from your home office to other temporary business locations or clients sites, you can deduct the actual travel expenses or claim the standard mileage rate of $0.565 per mile. For instance, if you traveled a total of 1,000 miles to various business locations, you could deduct $565 (1,000 * $0.565). The total tax deduction $565 would result in a $158.20 reduction to your overall tax liability which assumes a 28% tax rate. If you choose to claim the actual expenses, you would need to allocate the expenses by the portion of miles used for business travel versus personal travel as detailed in IRS topic 510.