I bought a new car in 2016. When I used it for business, I was paid a mileage reimbursement. Can I still claim a depreciation credit on my tax return for my vehicle?
If you took a mileage reimbursement from your company you are most likely not eligible to claim a depreciation credit for the same vehicle on your tax return. The reason being, mileage reimbursement includes a depreciation component as well. Therefore, you cannot claim depreciation in addition to the reimbursement.
Your employer might’ve included the reimbursement in your wages on your W-2. If so, you can deduct your transportation expenses. You can deduct the expenses using either:
- The standard mileage rate -- for miles driven
- Actual expenses -- for those allocated to the business use of the vehicle. Actual expenses will include depreciation.
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So how much will you get (or owe) this year? That’s the million-dollar question. We happen to have three very useful calculators to help you estimate your refund or balance due.