At work it is my responsibility to plow snow in order to provide save environment for all employees. To do so I bought a car-plow that is my private possesion. This year I had to change a transmission and spent a lot of money on that. Can I claim the transmission change expense as a work related expense that was not reimbursed by emploeyer?
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yes, but only the % that you use the car for business purposes.
you would also have to itemize your deductions in order to take this expense. if you take the standard deduction, you would not report unreimbursed employee expenses. these expenses are subject to 2% of your adjusted gross income (AGI).
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Yes, maybe. IRS FORM 2106 Unreimbursed Employee Business Expenses is where it would go, but the form is difficult to fill out yourself. First, it has a threshold of 2% of your Adjusted Gross Income before you can start deducting expenses. In other words, if your income is $50,000, you can’t deduct the first 2% or $1,000, but above that you can also deduct the cost of the plow itself if it’s required by your employer but not furnished by depreciating it over it’s useful life. With cars/light trucks, you have to make a decision as to one of two ways to write off expenses. The most common way is to deduct mileage at so much per mile (changes with the rise and fall of gasoline prices), but in your case that probably isn’t the way to go since your commuting mileage (home to the parking lot) isn’t deductible, only the miles driven in business. In your case you would probably want to set the car up for Actual Expenses in which case you would depreciate the car on your taxes (complicated formula for doing so) over a period of years, and write off the actual cost of maintaining it, including repairs, but only the business portion of any repairs. From what you said, during the warm months, there would be no business use. That’s why I said maybe. You could very well be challenged by the IRS and if you lose, you would have to give back the money.
The other factor you have to consider is that if you are married and filing jointly, for ‘06 everybody gets a Standard Deduction of $10,300, so if you itemize your deductions and your car expense, home mortgage interest, real estate taxes, charitable contributions, etc don’t exceed $10,300, you are better off to choose the $10,300 instead of the itemized deductions which include the car repair. You have to choose one or the other, not both. In other words, if you rent and aren’t paying big real estate taxes, high mortgage interest, or have a whole lot of unreimbursed medical expense, it’s pretty difficult to come up with more than $10,300 worth of itemized deductions.