TaxProTalk.com

I have a client who is self employed as a consultant. His business use of the vehicle is approximately 90% and well documented . He has a substantial number of luncheon meetings with clients plus driving to various business sites with clients in his car.

He uses the standard mileage rate for calculating auto expenses rather than actual.expenses. Due to the nature of his business he feels it necessary to have his car washed every week .Can he add these business car washes to the standard mileage deduction ?

A review of Section 4.03 of Rev. Proc.2010-51 has no mention of car washes as an addition to the standard mileage allowance . The items mentioned separately are only parking fees ,tolls , vehicle interest ,and personal property taxes .

The car washes are not deductible if using the mileage rate.

I agree. Read right above 4.03, in 4,02.

Items such as depreciation or lease payments, maintenance and repairs, tires, gasoline (including all taxes thereon), oil, insurance, and license and registration fees are included in fixed and variable costs for this purpose.

Well at least for California taxpayers there is a separate add on to the standard mileage deduction for the California license tax which is considered personal property . This will reduce both the self employment tax as well as regular income tax .

I have a client with one of those Hybrids. He noticed his home power bill is more than it used to be, before he got the hybrid, because he charges the Hybrid’s battery from an outlet at his home. This additional electricity cost, times the business use percentage of the vehicle, can be added to the deduction computed using the Standard Mileage Rate, correct?

Excellent loophole. He deducts the extra power bill and, indirectly thru the mileage deduction, the gasoline he doesn't use. Don't you just love it?

If client uses the actual method for computing auto expense I would say definitely yes . However if client uses the Standard Mileage Rate it seems to me the answer is no for 2 reasons .

First it is not listed in Section 4.03 of Rev proc 20-51 as an add on item to the standard mileage rate . Secondly the additional expense for electricity seems to fit in the category of fuel or maintenance .

First it is not listed in Section 4.03 of Rev proc 20-51 as an add on item to the standard mileage rate .. But 4.03 does not say the items it lists are the only items.

Secondly the additional expense for electricity seems to fit in the category of fuel or maintenance .. A much better reason. since 4.02 says "Items such as ... gasoline ...".

Secondly the additional expense for electricity seems to fit in the category of fuel or maintenance .

There is no category of “fuel” that I can see in the Rev Proc. And I don’t see how it’s really maintenance.

First it is not listed in Section 4.03 of Rev proc 20-51 as an add on item to the standard mileage rate .

Correct, but I don’t see where it says that “add on” list is an exclusive list.

And I forgot to mention, he has a home office too…

Jeff - "And I forgot to mention, he has a home office too…"

To me, that makes a difference.

So then are you taking this as a "utility" expense of the business or as an "auto expense" of the business?

Certainly can see it as a line item utility expense but not auto expense.

... a "utility" expense of the business or as an "auto expense" of the business .... Or both.

Under the mileage method - not as an addition to/of "auto expense" that is calculated as # of business miles x business $$ (cents per mile) for the given year.