"mrsgator88" <nomospam[at]nomospam.com> wrote:

- quote -

Car expenses are legitimate business expenses, but they are
limited, and you have to figure them according to IRS rules.

If he has a qualified home office (a place set aside in his
home where he does billing and business correspondence,
keeps his books, and the like -- and nothing other than
business work), he's one step ahead, because none of his
mileage is commuting.

If he doesn't have a home office, some of his mileage: from
home to his first place of work of the day, and from his
last place of work to home, is commuting. Commuting expense
is personal, not business.

He can use the standard mileage rate (37.5 cents/mile in
2004) for all business mileage. This is simplest, but it may
be (and probably is) less than his actual expenses.

He can take actual expenses and pro-rate these by the
mileage he drove for business vs. other uses. Actual
expenses are pretty much anything that costs money to
operate a vehicle (well, not parking tickets or other
fines). Interest (but not principal) payments on his auto
loan are an expense. Depreciation (that which makes a 2002
worth less than a 2003) is also, but it's limited and takes
a little more work to figure.

There are additional complexities involved in switching
between the standard mileage rate and actual expenses.
Publication 946 has a long section on depreciation of
automobiles that discusses this.

--
Chris Green

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- quote -

As a business related expense, car payments are not
deductible. However, it MAY be possible to deduct interest
paid on the percentage of the payment which represents
business debt.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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- quote -

Payments, NO. Expenses, based on either actual expenses or
mileage, possibly.

He needs to see a tax pro.

Carol
My mind not only wanders, sometimes it leaves completely.

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"mrsgator88" <nomospam[at]nomospam.com> wrote:

- quote -

He can't deduct the car payments as a business expense. He
may be able to deduct the business percentage of the
depreciation, repairs, gas and oil, insurance, and other
costs relative to the car. He needs to look at Form 2106
and see how it applies to his situation.

Wayne Brasch, CPA, M. S. Taxation

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My brother is self employed, sole proprietor. He is a
personal trainer. He wants to know if he can deduct his car
payments as a business expense. He owns his car, and is
paying off a loan. Probably 80% or more of his travel is
work related. He works at his clients' homes, and also at
various gyms in the area. When he trains someone at a gym,
he is not treated as an employee. Some gyms treat him as an
independent contractor. At the other gyms, he rents space
by the hour. He is not incorporated. Thank you in advance.

Sincerely,

Steve

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