Deductible Motor and Regional Travel Business Expenses Related to Property Ownership

Posted by on October 17, 2013 · Leave a Comment 

Travel expenses considered required and ordinary are deductible. Certain expenditures you may be able to write off range from the expense of employing your own personal vehicle to receive rental payments from occupants as well as performing property maintenance tasks. Given that driving to and from work is a private expense it isn’t allowed for deductions. Moreover, you may not write off the cost of travel to the property to provide improvements. That is usually recoverable in a cost recovery process such as depreciation.

Actual Expenses

The many different expenditures regarding travel out of the home in association with the leased residences will be recorded in this method. These kinds of business expenses should be reported and supported by invoices and receipts as stated by IRS Publication 463, Chapter 5. A few software program apps are available using iPod, Quick Books, Mint, and more; nevertheless, you need to continue to have a tangible document to backup these tax deductions. It is necessary to report this on either a Schedule C or Schedule E. All expenses need to be allotted to each residence where expenses were accrued if you have different properties. Remember to not add in any type of personal use of vehicles or any other type of use apart from that which is pertaining to your rental properties.

Mileage Method

All mileage drive during the year is deductible at $0.55.5 per mile. You may deduct the total cost.

Using local transport like Zip Cars, metro bus, and auto rentals will need to have a principal correlation to the premises and should have documentation to support this. If using public transport, it is strongly suggested that you maintain records of travel costs. It is advisable to correlate all Zip Car and rental car costs to a business account tied directly to your rental property business.

Quick Note: You can obtain the different documents outlined in this information on the IRS’s webpage. Reference IRS Publication 527 to find out more.

Redmond CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.

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