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.
Are you eligible for tax credits when pursuing higher education? Learn more about these credits and get tax answers at H&R Block.
Do you earn an income in Pennslyvania? If you answered yes, read on to find out more about how and when to pay your PA income tax.
Can you deduct child support payments from your taxes? Learn more from the tax experts at H&R Block.
Find out if you can claim deductions missed on prior tax returns with advice from the tax experts at H&R Block.