Can I claim car and mileage on taxes?

I have a question.... How do I claim the car that I just purchased and the mileage from the old car that I traded in, on my taxes. Yes, I do have a "regular job", but I do a lot of traveling for my Mystery shopping. Because of that, I needed to purchase a car for reliable transportation. I have bills from the mechanic to justify the purchase of a new "used" car.

Little lady shopping Southern Louisiana & Mississippi. smiling smiley

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Zeta - The following are general comments, not tax advice. For tax advice, consult or an enrolled agent.

You have two options on every car you put in service, and you must select the option the year you put it in service. You can choose to deduct the IRS allowed business mileage allowance, or you can choose to deduct actual expenses, including depreciation, applicable to your business mileage.

You cannot deduct the cost of a car. You can depreciate a car over several years, and deduct the business part of the depreciation. The percentage of the depreciation you can deduct annually will depend on the number of personal miles and the number of business miles.

If you elect to depreciate the car, you can deduct your actual operating expenses applicable to the miles you drive the car for business. You cannot deduct the mileage allowance if you depreciate the car. You must choose the first year you put the car in service as to whether you will claim XX cents per mile allowed by IRS for business mileage, or whether you will depreciate, deduct the business percentage of the depreciation, and deduct actual expenses incurred for business mileage.

Mary Davis Nowell. Based close to Fort Worth. Shopping Interstate 20 east and west, Interstate 35 north and south.
AND, either way, you really MUST record mileage showing every trip that you make in your car as either for MS, commuting, or personal use.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.
Shopgal - If you have been paying a lot of income tax on your mystery shopping earnings, you have probably not taken advantage of all the legal deductions. You can file an amended return for three years back and possibly recover overpaid money, if any. Your tax professional can advise you the best course to take.

Mary Davis Nowell. Based close to Fort Worth. Shopping Interstate 20 east and west, Interstate 35 north and south.
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