To determine whether you can claim a deduction for the expense of making repairs to a handicap van, you must first consider if it's a business or personal expense. Although a deduction is available for both types of expenses, the amount you can deduct for handicap van repairs and the way you must report the deduction are different.
Business Handicap Vans
If you operate a business that transports passengers in a handicap van, the IRS treats all of the expenses that relate to the van as a fully deductible business expenses. This includes the cost of making all repairs to the van, your lease payments, van insurance premiums and gasoline. However, if the insurance your business carries for the van covers the cost of repairs, you cannot claim a deduction. Any repair deduction you claim must be for an actual expense the business has to pay. If you receive reimbursement for the cost from insurance, or any third party, the business is not paying the repair expense.
Medical Expense Deduction
If you, your spouse or any of your dependents need the handicap van because of a medical disability, the IRS allows you to include the repair costs in your medical expense deduction. You need to ensure that the van has equipment that allows a handicapped person to drive it or provides easier access into the van, such as a wheelchair lift or ramp. Otherwise, the van does not satisfy the requirement of serving a medical purpose and is not covered under the medical expense deduction. When you include this expense in your medical deduction, keep in mind that the IRS requires you to reduce your total medical expenses for the year by 7.5 percent before a deduction is available.
Handicap Van Casualties
If your van requires repairs as a result of a casualty event, you can claim a casualty loss deduction as an alternative to the medical expense deduction. A casualty is a quick, sudden or unexpected event, such as a car accident or tornado that causes damage to your personal property. When your van is damaged in a casualty event the IRS allows you to deduct your loss. You start with the actual cost of the repair and reduce it by $100. From this amount you reduce it again by 10 percent of your adjusted gross income. The result is the amount you can deduct.
Reporting Van Deductions
The IRS has different reporting requirements for each type of deduction you claim that relates to repairing your handicap van. If taking it as a business expense, you simply report it on the business tax form you normally report all income and deductions on. However, if claiming the repairs as a medical deduction or casualty loss, you can only do so on a Schedule A. This requires that you elect to itemize your deductions. If you claim casualty loss, you also need to report the details of the casualty event on Form 4684.
Tags: casualty event, casualty loss, amount deduct, claim casualty, claim casualty loss, claim deduction
