Ask an AI Accountant

A free tool by

Question
Can I claim the payments on my car that I use for deliveries (Doordash and UberEats) even if I purchased it with a loan 18 months before I started with the delivery services?
AI accountant’s answer:

Absolutely! You can claim car expenses related to your delivery services, even if you bought the car before you started delivering. There are two methods you can use to calculate your deduction: the standard mileage rate or actual expenses.

The standard mileage rate is the simpler method. You just multiply the number of miles you drove for business purposes by the IRS standard mileage rate for the year. For 2023, the rate hasn't been announced yet, but in 2022 it was 58.5 cents per mile for the first half of the year and 62.5 cents for the second half. This rate includes costs like depreciation, gas, maintenance, and insurance.

The actual expenses method is a bit more complex. You'll need to keep track of all your car-related expenses, like gas, maintenance, repairs, insurance, and depreciation. Then, you'll calculate what percentage of your total driving was for business, and apply that percentage to your total expenses.

Remember, only the business use portion of your car expenses can be deducted. So, if you use your car for both personal and business use, you'll need to keep track of your mileage to determine what percentage of your total driving was for business.

Also, if you have a car loan, the interest portion of your payments can be included as part of your actual expenses. However, the principal portion of your loan payments isn't deductible.

Keep in mind that once you choose a method for a specific car, you generally must stick with that method for the entire time you use that car for business.

Not Correct.
Looks good

Keeper’s AI Accountant V2

V2 is still a fine-tuned instance of GPT-4. Improvements over V1 include more comprehensive tax code embeddings, and better chain-of-reasoning retrieval system.

Estimate tax saving

Track and claim every eligible deduction with Keeper

Keeper is the top-rated all-in-one business expense tracker, tax filing service, and personal accountant.