I bought a new car in 2020. 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 have 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.
Related Resources
Looking for more info on Alabama taxes? Find out who pays Alabama state taxes, how to find your tax rate, who to contact & more from H&R Block.
Do you earn an income in Louisiana? If you answered yes, read on to find out more about how and when to pay your LA income tax.
Can you take a deduction for a business loss? Learn more from the tax experts at H&R Block.
Want to know more about NJ property tax rates? Read on to learn who owes NJ real property taxes, how to pay, and when to pay.