Can Car Repairs Be Claimed on Taxes?

The cost of car repairs can be a significant expense, prompting questions about potential tax deductions. While repairs for personal vehicles are generally not tax deductible, specific circumstances allow these costs to be claimed. Deducting car repair expenses largely depends on the vehicle’s use, with business-related use being the main factor for tax benefits.

Personal Vehicle Expenses and Taxability

The Internal Revenue Service (IRS) generally considers expenses for personal vehicles, including repairs, to be non-deductible personal expenses. This applies to cars used for daily commuting between home and a regular workplace, personal errands, or recreational activities. The IRS does not allow deductions for these costs because they are not considered “ordinary and necessary” expenses for earning income.

Even if a personal vehicle is occasionally used for work-related tasks, its repair costs are not automatically deductible. The distinction between personal and business use is fundamental to IRS tax rules. Therefore, for most individuals, car repairs for a personal vehicle will not provide tax relief.

Vehicle Use for Business Purposes

Deducting vehicle expenses, including repairs, becomes possible when a vehicle is used for business purposes. The IRS defines business use as travel between business destinations, such as trips from one job to another, travel between client sites, or going from an office to perform business tasks like picking up supplies. This distinguishes business travel from non-deductible commuting, which is daily travel between home and a regular place of business.

Self-employed individuals, including freelancers, independent contractors, and gig economy workers (e.g., rideshare drivers or delivery service providers), often use personal vehicles for business. If a vehicle is used for both personal and business reasons, only the portion of expenses related to business use is deductible. For those without a regular place of business, travel from home to a temporary worksite outside the metropolitan area can also qualify as business travel.

Deducting Car Repairs

Once a vehicle’s business use is established, taxpayers can deduct related expenses using one of two methods: the actual expense method or the standard mileage rate. Car repairs are deductible under the actual expense method. This method allows deduction of specific vehicle operating costs for business, including gas, oil, tires, insurance, registration fees, depreciation, and repairs. Only the percentage of these costs attributable to business use is deductible.

If a taxpayer chooses the standard mileage rate, car repairs are not separately deductible. This is because the standard mileage rate, which was 67 cents per business mile driven in 2024, already incorporates an allowance for all vehicle operating expenses, including depreciation, fuel, and maintenance. Taxpayers must generally select one method for a given vehicle in a tax year. However, if the standard mileage rate is used in the first year a vehicle is placed in service for business, a taxpayer typically has the flexibility to switch to the actual expense method in subsequent years.

Record Keeping for Vehicle Expenses

Record-keeping is essential to substantiate any vehicle expense deductions, including car repairs. The IRS requires detailed records to support claims, especially for mileage and expenses. Regardless of whether the actual expense method or standard mileage rate is chosen, taxpayers must maintain a mileage log.

A mileage log should record the date of each business trip, the destination, the business purpose, and the total miles driven or odometer readings at the start and end of the trip. For those using the actual expense method, receipts for all repair work, parts, maintenance, gas, and insurance must be kept. These records are important for verification in the event of an IRS audit.

Reporting Vehicle Deductions on Tax Returns

After calculating eligible vehicle expense deductions, report these amounts on the appropriate IRS tax forms. Self-employed individuals, including independent contractors and gig workers, typically report business vehicle expenses on Schedule C (Form 1040), Profit or Loss From Business. This form details income and expenses from a business, and vehicle deductions are entered as part of overall business expenses.

For expenses related to vehicles used for rental properties or other income-producing activities, taxpayers generally report these on Schedule E, Supplemental Income and Loss. While employee business expenses were historically reported on Form 2106, Employee Business Expenses, the Tax Cuts and Jobs Act of 2017 suspended most miscellaneous itemized deductions subject to the 2% floor for tax years 2018 through 2025. As a result, most employees can no longer deduct unreimbursed car expenses. However, certain categories of taxpayers, such as Armed Forces reservists, qualified performing artists, and fee-basis state or local government officials, may still be eligible to use Form 2106. Tax preparation software or a qualified tax professional can assist in accurate reporting of these deductions.