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Can I write-off my gas as a business expense?

I drive a lot for work and my company doesn't give me a stipend for gas or mileage. With gas prices so expensive right now am I able to write off any of these expenses?

Feb 28, 2012 by Tanner from Temecula, CA  |  Flag
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Jim Blankenship Level 17

Tanner,

If driving from your "regular" place of business (typically your office or home office) is a part of your job, such as visiting with customers or vendors, or driving to the airport to travel in order to perform your job, then fuel can be considered a deductible employee expense if not reimbursed. Commuting between your home to your regular office is not counted as a deductible expense, although driving from one office location to another during the course of your regular activities, such as if you had two or more offices in the region, could be counted.

You are allowed to deduct your travel expenses as described above, either by tallying up all of your expenses OR by using the standard mileage rate, but not both. Typically mileage is not only easier to calculate but it will result in a larger deduction than fuel alone, as the mileage rate accounts for fuel, upkeep, and cost of ownership (insurance, depreciation, etc.). Tolls during the non-commute driving are also deductible, as would be a portion of a toll pass if you used it for both business and commuting or personal use (you'd have to calculate the percentage of business use).

Parking is also an allowable expense for this purpose - but parking tickets (and speeding or other tickets) are not allowable expenses, as breaking the law is not considered to be a part of a legitimate business expense. (I know, crazy, right?)

All of these expenses are limited by the Miscellaneous Expenses floor of 2% of your Adjusted Gross Income. This means that you can only deduct the amount of these expenses (in aggregate with all other miscellaneous deductible expenses) to the extent that they are greater than 2% of your AGI. You also must itemize deductions (using Schedule A) in order to claim these expenses, and use Form 2106 for reporting the expenses.

The standard mileage rate in 2011 was 51 cents per mile before 7/1/2011, and 55.5 cents per mile after 6/30/011.

jb

Comment   |  Flag   |  Feb 29, 2012 from New Berlin, IL

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Tanner, I just asked my accountant the same question! Her answer was that gas/mileage for normal commuting is not deductible. But that was idiosyncratic advice based on my situation and being self employed. I would try to find a local CPA through a referral that can advise you based on your situation. Best of luck! Evan

Comment   |  Flag   |  Feb 29, 2012 from Port Washington, NY

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