Can 1099 Employees Deduct Car Expenses on a Tax Return?

When you take a business trip, it's a business deduction.

When you take a business trip, it's a business deduction.

If you get a 1099-MISC in the mail instead of a W-2, you're not really an employee. Businesses send out the form to independent contractors who do more than $600 worth of work for them over the year. As a freelancer, you report your 1099 income on Schedule C. You also use Schedule C to deduct car expenses.

Car Expenses

You can write off either the actual expenses for business driving -- gas, oil, tolls and repairs, for instance -- or take a straight mileage deduction. As of 2012, the IRS lets you write off 55.5 cents per mile of business travel. To track mileage, just keep a record of your business trips. For actual expenses, record your vehicle expenses for the year, then divide that by the percentage of business travel: If 40 percent of your car use is work-related, 40 percent of your annual costs are deductible.

Business Driving

Commuting to work is not a tax write-off -- not for employees, and not for independent contractors driving from home to a client's office. If you have to commute between two different client offices, or you use your car to make sales calls on clients, those expenses are deductible. If you have a home office for your business, driving from your house to your client's work site does qualify as deductible. You have to meet the IRS qualifications for a home office.

Claiming

Your 1099 business income goes on Schedule C, along with pay from clients who didn't pay you enough to send out a 1099. Keep track of your business driving throughout the year and use that to figure your deduction. Write down your total driving expense in the deductions section of Schedule C. Subtract it from your income along with your other expenses to figure out how much tax you have to pay.

Records

You don't have to track every click of your odometer to prove your business travel expenses. If you have a fixed schedule -- you drive a total 120 miles from your home office to your 1099 client each week -- you can use that to take your mileage deduction. Alternatively, you can also write down your business and personal travel for a couple of weeks each quarter to determine how much of your year's driving is for business.

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Author of two film reference books, "Cyborgs, Santa Claus and Satan" and "The Wizard of Oz Catalog." Published in Air & Space, Backpacker, Newsweek, The Writer, and multiple trade journals (can fax samples if requested, don't have them available digitally)

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