Motor Vehicle and Travel Expenses which Are Allowable for Deduction for Landlords

The specialized usage of your personal automobiles or other forms of transportation may be deducted as an expense based on certain factors such as if they’re ordinary and needed. If you work with your own personal car to receive rental payments, perform maintenance duties and/or managerial tasks these are deductible travel costs. Commuting is considered a personal cost and is not deductible. Any travel costs tied to making improvements on a rental property may not be deducted. A cost recovery system such as depreciation will usually take care of this.

Actual Expenses

The various expenditures which are pertaining to having to travel from home associated with the rental residences are recorded in this approach. IRS Publication 463, Chapter 5 specifies how all of these costs will have to be documented and backed up with invoices or receipts. You need to have a concrete record to backup your write offs, although you will find software program apps offered with iPod, Quick Books, Mint, among others.. You must report this in your Schedule C or Schedule E along with corroborating forms included. When you’ve got more than one rental properties, your costs will be allotted to the individual residences that costs were incurred. Only use of vehicles that’s involving the property is deductible, so know never to include any non-business or other sorts of costs that aren’t associated with your rental properties in the tax forms.

Mileage Method

Here you may write off your actual miles driven. You’d employ the current standard mileage tax rate of $0.55.5 per every mile drive that tax year.

You will need records to support any kind of utilization of area travel such as car rental, Metro bus services, and Zip Cars along as the use of which is directly associated with travel to your rental premises. It is a good idea to save your ticket stubs for local travel. It is also a good idea to charge Zip Car and car rental services  on a business account tied directly to your rental property.

Quick Note: You can obtain the different documents outlined in this information on the IRS’s webpage.For more information be sure to consult IRS Publication 527.

Burien 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.