Are automobile expenses deductible as a business expense?
(revised November 2015)
Automobile expenses are deductible when the automobile is used for business.
Most individuals cannot deduct any auto expense because "used for business" does not normally include to and from home. For tax purposes, this type of driving does not qualify as a business use of the vehicle. However, if you stop to pick up supplies on your way to work, the subsequent mileage to the job site should be business mileage. For example, a drywall installer stopping at Home Depot for a load of drywall for his or her job that day.
Also, and any additional costs that you incur to carry your work tools is deductible. For example, a welder who uses his truck to haul 1,000 lbs of welding equipment to the jobsite. The additional fuel costs for his truck would be deductible.
Generally, travel between two business locations (e.g. a daytime and a night job) qualifies for business use. Similarly, travel to both customers and job sites qualify for business travel if you have a permanent job location that you go to on a regular basis; however, if all of your job locations are temporary, you may not be able to deduct any of your automobile expenses.
If you drive to and from a temporary location outside of the metropolitan area, the auto mileage is considered business mileage; however, the IRS considers the greater Chicagoland metropolitan area to cover a very large area (e.g., up into Wisconsin).
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