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If as part of self-employment work a person uses their own vehicle to get to the place where they will do the work. If the vehicle is damaged when it is there for some reason, including the person accidentally hitting something. Is it possible to deduct the costs of repairs as a business expense, or is that really a personal expense?
What if you get into an accident going to a site?
This is all assuming you don't have enough revenue to get another vehicle for this work, so you use your personal vehicle to get to sites.
If you use the vehicle for business use, then I believe you can deduct repairs up to the percentage amount that you use it for business in a year, but only if you itemize instead of taking the standard deduction.
I'd check with your current insurer for advice, and make sure your covered while using the vehicle for work.
My understanding is that personal auto coverage will not cover any damage or liabilty which occurs as a result of business use.
What you have is an exposure and if you have an accident while doing business, your auto insurer is not obligated to pay.
Hope this helps a little.
Most insurance companies have a rider you can add to your car "personal car for business use" that takes care of this issue.
As far as deducting repairs-you can claim your auto expenses 2 ways-actual or standard. Actual is the actual cost to use the car, gas, repairs, etc. Standard is a per mile rate determined by the government. Once you pick a way to go on your car you have to stay with that way for as long as you use that car. I am self employed but have a newer car that requires little in upkeep so the standard deduction is the way to go for me--it is MUCH better actually. If this is your first year using the car for self-employment do a lot of research on how you want to claim this expense before you just pick one or the other.
Most insurance companies have a rider you can add to your car "personal car for business use" that takes care of this issue.
As far as deducting repairs-you can claim your auto expenses 2 ways-actual or standard. Actual is the actual cost to use the car, gas, repairs, etc. Standard is a per mile rate determined by the government. Once you pick a way to go on your car you have to stay with that way for as long as you use that car. I am self employed but have a newer car that requires little in upkeep so the standard deduction is the way to go for me--it is MUCH better actually. If this is your first year using the car for self-employment do a lot of research on how you want to claim this expense before you just pick one or the other.
Thanks everyone, I decided to use the standard accounting, and just pay for the repair out of pocket without bothering accounting for it. It is still kind of annoying, I ended up spending $55 for the part, and $35 to install it so it wasn't that bad, but still $90 after tax, I have to gross almost $180 of self-employment income to make up for it it seems (SE tax + Fed Income tax + CA income tax).
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What insurance is on your Auto?
