Deductible Vehicle and Transport Expenses Related to Rental Premises

When travel expenses are essential, and suit certain factors, then they become deductible. Various travel expenses that you may write off include travel to secure rent payments from occupants and to perform maintenance duties on your property. Be aware commuting to work is regarded as a private cost and not allowed for deduction. All expenses incurred from traveling to your rental property to make improvements will not be tax deductible either. A cost recovery process like depreciation will ordinarily cover that.

Actual Expenses

These costs need to be documented and supported by invoices and receipts in accordance with IRS Publication 463, Chapter 5. You’ll need a ┬árecord to backup the deductions. You’ll discover software program applications on the market by iPod, Quick Books, or Mint, as well as others. It is expected this data be reported, along with important documents, on your Schedule C or Schedule E. For people with different properties, your expenses should be allocated to the premises where costs were accrued. Only use involving the property is tax deductible, so do not incorporate any non-business or other kinds of expenses not related to the properties.

Mileage Method

Here write off just your actual mileage traveled. To illustrate, if you traveled twelve hundred miles in the course of 2012, you would write off the standard mileage rate of $0.55.5 per mile, according to current tax rates.

Using neighborhood transport including Zip Cars, metro bus companies, and automobile rental, this kind of travel must have a principal relationship to the properties and you must have documentation to support this. If working with public transport, it is encouraged that you have a log of expenses plus an individual business account for rental cars and Zip Cars to show that this use is entirely business relevant.

  • You can obtain the different documents outlined in this information on the IRS’s webpage. For more info, you can consult IRS Publication 527.

Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.