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I am required to drive for my job; and I have a question about how to deduct vehicle expenses from my tax return. As an employee, how do I deduct mileage or other vehicle related expenses?

To deduct mileage or vehicle related expenses you must own or lease the vehicle that you are driving for business and you must use the vehicle for business purposes. However, you can only deduct the costs associated with the business use of the vehicle. If you use your car for business purposes, then you may be able to deduct some vehicle expenses as well as the mileage your incurred for business travel. To determine if you are eligible to deduct mileage or other vehicle expenses from your tax return, you can use one of the following methods to calculate your deduction:

  • Standard mileage rate for 2016 -- $0.54 per mile
  • Actual vehicle expenses

You may find that you qualify for both methods. If so, you may want to calculate your deduction under each method to determine which works best for you. Once you have calculated your mileage deduction and your vehicle expenses related to your business use, you will need to report these expenses on Form 2106.



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