When your job keeps you on the road, requiring you to be away from home overnight, the IRS allows you to claim a deduction for some of the travel expenses you incur as well as the cost of gassing up your vehicle and making repairs to it. However, to claim these types of deductions, your total expenses must exceed your standard deduction since you can only deduct these expenses if you itemize.
Gas Expenses
When your employer requires you to use a personal vehicle for work, you can claim a deduction for all gas purchases you make that relate to your job. Using a personal vehicle for work also includes any traveling you do for a business trip or other work-related purpose. There are two ways to calculate your deduction. You can either keep track of all gasoline purchases and deduct the actual cost or use the IRS standard mileage rate. Using the standard mileage rate makes your recordkeeping a little simpler since you only need to keep track of the miles you drive for work rather than the precise amount of gasoline you use.
Vehicle Repairs
One drawback to using the standard mileage rate for your gasoline expenses is that you cannot claim an additional deduction for the cost of repairs to your vehicle. Therefore, if you drive a significant number of miles for work each year, it may be beneficial to use actual costs for all car expenses so you can claim a deduction for the cost of repairs. In most cases, you cannot deduct the full cost of repairs since you also use the car for personal purposes. For example, if you spend $500 for general repairs to your car during the year and 60 percent of the miles you drove are for work, then you can deduct 60 percent ($300) of the repairs.
Motels and Hotels
Deducting the motel and hotel charges you incur to get a good night's sleep is more straightforward than deducting your car expenses. As long as it's necessary for you to stop for rest, then you can include 100 percent of your motel costs in itemized deductions. However, if your employer asks you to drive 20 miles from your home to a client's location, it's not necessary for you to stay in a motel since you can easily drive home. When it's necessary for you to stay in a hotel, you can only deduct reasonable hotel charges. If an average night in a motel in the area costs $200, then the IRS may not allow a full deduction if you stay overnight at a resort charging $700.
Schedule A Implications
The expenses you incur for gas, car repairs and hotels while on the road are part of the miscellaneous deductions subject to the 2-percent limitation on your Schedule A. This means that when you add up these types of expenses for the year, which can include expenses that don't relate to your job-related travel, your deduction equals the amount that exceeds 2 percent of your adjusted gross income.
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