Car and Truck Deductions

According to an IRS fact sheet recently posted at http://www.irs.gov/newsroom/article/0,,id=163780,00.html , overstated adjustments, deductions, etc., account for more than $30 billion in unpaid taxes annually. Therefore, this fact sheet (the fifth in a series) explains the rules for deducting car and truck expenses. Taxpayers can use the standard mileage rate or actual expenses to compute their allowable business deduction, and can deduct the larger of the two. The 2006 standard mileage rate of 44.5 cents per mile cannot be used if the taxpayer (1) uses the car for hire (such as a taxi), (2) uses five or more cars at the same time (as in fleet operations), (3) claims depreciation or a Section 179 deduction, or (4) is a rural mail carrier who receives a qualified reimbursement. Regardless of which method is used, only the business use percentage of each expense is deductible if the business use of the vehicle is less than 100%. Fact Sheet FS-2006-26.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.