Deductible Vehicle and Transportation Expenses Regarding Rental Premises

The specific usage of your own automobiles as well as other cars may be allowed as an expense depending on a number of factors when common and vital. Should you use your own motor vehicles to help maintain and operate a leasing property or to secure money from occupants, you may write off such costs. Since commuting to work is seen as a private expense, it’s not allowed for tax deduction. Likewise, you won’t write off the costs of traveling from your private home to make improvements to premises. A cost recovery system like depreciation will usually deal with this.

Actual Expenses

You will document all the costs pertaining to your travel from home in connection with the leasing property. Those expenditures must be documented and backed up with receipts relative to IRS Publication 463 Chapter 5. Certain software program apps can be purchased via iPod, Quick Books, Mint, and more; you will have to continue to keep a concrete report to support any deductions. You have got to report this either with your Schedule C or Schedule E along with important documents connected. Any expenditures must be allotted to each property where the expenses were incurred if you’ve got a number of rental properties. Only use that’s connected with your rental properties is tax deductible, so remember never to add any kind of personal or other sorts of non-property related expenses on the tax forms.

Mileage Method

Here you write off your actual distance driven to your rental property. For instance, if you drove twelve hundred miles throughout the year of 2012, you would implement the present standard mileage rate of $0.55.5 per mile, and write off the cost.

Working with community transport like Zip Cars, metro bus services, and vehicle rentals will need to have an immediate correlation to the real estate property, and you must have records to support it. In order to show that this public transport use is exclusively business related, it is suggested that you obtain different fare cards and individual company accounts for all Zip Cars and rental cars used.

Quick Note: You can obtain the different documents suggested in this information on the IRS’s webpage. Check with IRS Publication 527 for more information.

Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.