Taxes
Are car repairs tax deductible? Writing off auto repairs
Are car repairs tax deductible? Yes, if you use your car for business. but there are some rules and specifics to know.
When Are Car Repairs Tax Deductible?
The actual expense method allows you to write off many costs. This includes business driving costs, car repairs and car improvements. You add these costs to your other annual expenses. If you use the standard mileage rate, you get no deduction for repairs. These are already factored into the standard rate (53.5 cents per business mile in 2017). With the actual expense method, you may only deduct your business use percentage of your car repairs and improvements. If you drive your car 50% of the time for business, you can deduct 50% of the cost If you drive your car 50 percent of the time for business, you can deduct 50 percent of the repair costs. The remaining costs is a non-deductible personal expense. You may deduct the cost of parts and depreciate the cost of tools if you fix the car yourself. But, there's no deduction for your labor. Many of the expenses you incur to keep your car running are currently deductible‚ that is, the full amount can be deducted in the year incurred. Yet, some must be depreciated over at least five years. It all depends on whether the expense is for:
- A repair
- An improvement.
What Car Repairs Are Tax Deductible?
A repair doesn't make the vehicle better than it was in the past. In other words, a repair doesn't rise to the level of an improvement as described below. Repairs generally consist of minor fix-ups. One example is fixing a tail light. Car repairs are currently deductible in full the year they're made. A repair keeps your vehicle in efficient operating condition. Routine car maintenance is also currently deductible. For example, changing the oil, replacing air filters, installing new windshield wipers.
