Car Deduction on 2010 1040 Form

by William
(Austin, TX, USA)




I began a new career as an insurance appraiser last year. As a result, my self employment income was less than $40 with 2 listed dependents plus myself as a head of household.

My question is this. Do I have to take the car deduction for the 38,000 miles I drove for business? I qualify for the EIC, so if I don't use the deduction, my refund goes up by $3-4k.

My worry is, the IRS will see my car deduction on previous years, and require me to take it in 2010, which would mean I would owe $3k+ with penalties back.

The other easier question, is since my 2000 Mazda Protege is only worth about $2000, is it proper to receive a $10 or $12k deduction?

Thank you in advance for your help.

Regards,
William

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Jun 09, 2011
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Mileage Deduction Requirement
by: Anonymous

I believe that the IRS only specifically states that you are required to report all income, not exenses. In fact, with regards to the mileage deduction, they will not allow a deduction if adequate logs were not kept. Therefore, I feel it would be safe to say you do not have to report the mileage you drove throughout the year.

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