Ask TaxMama.Com Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA Volume 6, Issue 250        March 12, 2004

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Itinerant Bill Collector » From: Albuquerque, NM Dear TaxMama: I am starting a new job as a bill collector, but I have to use my own car. If I were to rent a car each day is that tax deductible? The company will pay me 37.5 cents per mile. But nothing else. They are putting me on a salary as well. With the mileage I collect, I can pay for the car if I put on 1500 miles per weeek, which is about the normal. I hate to have to buy a car and put all that wear and tear into it. Thats why if I rent a car each week I think it might work out. Thanks with any information you can help. Mike Hi Mike, Sure, if you were to rent a car for your job, you could take a deduction for the rental costs. Of course, since you have to itemize, you first have to deduct 2% of your adjusted gross income (the last line on page 1 of the tax return), then deduct your standard deduction, to see what the real value of your business expense deduction is. I understand why you wouldn't want to wear out your own car, on this job. But if you're going to spend $562.50 per month on a rental car, why not just buy a cheap, but functional used car, pretty it up a bit, and burn that out? It would cost you much less that way, and at the end, you could either sell it, or donate it, or strip it for parts, or turn it into a planter ... but you'd have something to show for your money. Incidentally, if you have other out of pocket expenses that are not reimbursed, you may be entitled to other deductions - read this IRS publication about deducting business expenses. Personally, I hate wasting money on anything rented. Best wishes, Eva Rosenberg Your TaxMama

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