Cars are one of the biggest expenses we have in our lives. From the depreciation, to the car loan payments to the insurance, it seems like a never ending stream of money that flows into it. As a result, we are always looking for ways to cut down on the expenses.

Sometimes that is in the form of mileage hacking or by using a car share service rather than own. One way to cut down on the cost of owning a car is to try to use some tax deductions. Namely, to deduct some of the costs of maintenance.

In some circumstances, you can certainly deduct some of these expenses. In this article, we will give you some tips on how to go about doing this.

Who can deduct car expenses

Let’s get right to the most important part of this and say that there is a narrow definition of who can deduct car maintenance expenses from their taxes. Not everybody can do this in other words.

For starters, you need to be a business owner that uses their own car for business or has a fleet of cars that employees use. Even if the employee uses the car just to commute, that car will be covered.

Also, if you are self employed or even freelance and need to use your car to do your job then any of the maintenance expenses that you face will also be deductible. If you are a sales person that works on commission and had some work done by VW & Audi service in Edmonton, then you can almost certainly write those expenses off.

You can’t write off your car expenses just because you commute to work in it, however.

Keep good records

You can’t just write in a number on your tax return that you wish to write off. You will need to keep detailed records of your trips and expenses. You can use software for this or a simple spreadsheet.

What’s important is that you keep a record of every time you use your car for a business related matter. Write the date and mileage of every trip that you take. Then, make a list of any expenses such as tolls and even any routine maintenance like getting brakes done or tune ups. Make sure to keep all of the receipts for these expenses so you can give them to your accountant to determine if they qualify for a deduction or not.

Unreimbursed expenses

You can also deduct other business travel expenses beyond just maintenance and repairs. If you are using your car for business and don’t get a travel allowance, then you can write off any of the gas you bought or tolls you paid.

You will not get the entire cost deducted, however, as it goes by a cost per mile. Again, making sure that you are keeping detailed records is essential. If you were to add any personal use expenses then this can land you in trouble.