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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22704
Experience:  Taxes, Immigration, Labor Relations
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Question on claiming mileage on my car that I drive for work.

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Question on claiming mileage on my car that I drive for work. The car I drive is MY car and I have purchased the car, it's mine. I am Director of Operations for my job, we have 4 restaurants. I work out of my home/office but go visit stores a few times a week. I only want to claim the mileage for traveling to the restaurants. My company does not reimburse me for my mileage but does pay for my gas. I do not keep great records on my mileage, but do have beginning and ending mileage for the year. I don't keep good records because I basically drive this car for work. I would say 90% of the miles are work, but I just claim 50% of the miles since I don't keep good records. I have done that in the past, but this year I changed vehicles and when I was putting stuff in Turbo Tax it seemed like it was trying to charge me the depreciation from the sale of my vehicle. What is your feedback on this? Is there a more simple way to do this? Also, in the past I have put that I have been reimbursed for the gas and added that back in, as to not double dip (I can't be getting the gas paid and collecting mileage too).
Submitted: 3 years ago.
Category: Tax
Expert:  Lev replied 3 years ago.

LEV :

Hi and welcome to Just Answer!

LEV :

If you used your car for business – it is treated as your business property.


When you sell the car – you may have gain or loss.


If you used the standard mileage rate for the business use of your car, depreciation was included in that rate. The rate of depreciation that was allowed in the standard mileage rate is shown in the chart that follows. You must reduce your basis in your car (but not below zero) by the amount of this depreciation.


 






























































Depreciation





Year(s)



Rate per Mile



 



2010



$.23





 



2008–2009



.21





 



2007



.19





 



2005–2006



.17







2003–2004



.16







2001–2002



.15





 



2000



.14





The adjusted basis would be your original purchased price minus adjustments according to the table above and miles you deducted each year. If your selling price is more than remaining adjusted basis - you have a gain – which TurboTax calculated for you.


You wrote that your employer doesn’t reimburse you for my mileage, but f you were reimbursed for gas – that amount should be deducted. You may deduct your travel expenses based on the standard mileage – but the total amount should be reduced by whatever you were reimbursed.


You do need a travel log to claim mileage. If you will not be able to provide the log – the risk is that in case of audit your deductions might be disallowed.


Let me know if you need any help.

Customer:

I see. So, it would probably be better for me to get the standard deduction from my employeer since I wouldn't be taxed on that amount and they would be able to deduct that from their taxes with out showing ownership of the car. Since I did sale the car I would still need to go back and figure how much depreciation there was from the previous years too, correct?

Customer:

If you don't mind helping me with a few more I'll be sure to increase how much I pay.

Customer:

I bought a hot water tank for my rental, can I claim that all at once as a repair or do I have to depreciate that out?

LEV :

As long as the car is used for business - it doesn't matter - if you deduct mileage or reimbursed by your employer based on mileage - the disposition of the car is treated the same way. That is true that some taxpayers do not do that - but legally they should.

Customer:

We adopted our daughter oversees this year. We will not come near being able to claim the whole deduction, our hard costs are about $8,000. Are there other expenses that we could look at charging, maybe something that I'm not thinking about? Thank you

LEV :

Please feel free to ask if needed.

Customer:

that's all I have and I will be done, thank you.

LEV :

A new hot water tank is an improvement - not repair - see page 5 - http://www.irs.gov/pub/irs-pdf/p527.pdf - it should be depreciated.

LEV :

The Affordable Care Act raises the maximum adoption credit to $13,170 per child, up from $12,150 in 2009. It also makes the credit refundable, meaning that eligible taxpayers can get it even if they owe no tax for that year.

LEV :

See revised Form 8839, Qualified Adoption Expenses.

Customer:

But we don't have expenses totalling $13k, only about $8k, so the $8k would be the max we got back. Expenses we have are legal fees, travel, other tiny fees along the way and such, of course we have all the receipts for that. I just can't claim $13,170 to get it all back, correct?

LEV :

See a list of qualified adoption expenses on the second page - http://www.irs.gov/pub/irs-pdf/i8839.pdf - but you may not claim expenses which you did not pay.


Customer:

Thank you LEV

LEV :

Please be sure to accept the answer. Experts are only credited when answers are accepted.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22704
Experience: Taxes, Immigration, Labor Relations
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