Deducting automobile expenses / I have my own business (an S corporation) that requires using my own car from time to time. Can I deduct my auto expenses on my tax returns?

Barry Dolowich for the Monterey Herald writes: Q: I have my own business (an S corporation) that requires using my own car from time to time. Can I deduct my auto expenses on my tax returns? 

Answer: Local transportation expenses are generally those incurred for the business use of a car. However, they also include the travel by train, bus or taxi. Businesses (including self-employed people and statutory employees) may deduct ordinary and necessary local transportation expenses from gross income. 

Commuting expenses for travel between a taxpayer's residence and a business location within the area of the taxpayer's home generally are not deductible; however, a deduction is allowed for expenses incurred in excess of ordinary commuting expenses for transporting job-related tools and materials.

An individual who works at two or more different places in a day may deduct the costs of getting from one workplace to the other. 

Expenses for gasoline, oil, tires, repairs, insurance, depreciation, parking fees and tolls, licenses and garage rent incurred for cars used in a trade or business are deductible. 

The deduction is allowed only for that part of the expense that is attributable to business usage. Also, you must take into account any employer reimbursements. 

Generally, an employee's unreimbursed expenses can be deducted only as a miscellaneous itemized deduction subject to the 2 percent adjusted gross income floor. 

A taxpayer can substantiate car expenses by keeping an exact record of the amount paid for gasoline, insurance and other costs along with detailed mileage records. The use of a preprinted car expense logbook, sold at most office supply stores, can be very helpful for tracking your expenses and mileage.

Under the standard mileage method, you can determine the amount of your allowable deduction by multiplying all the business miles drive during the year by the standard mileage rate. 

The standard mileage rate for 2013 is 56.5 cents per mile. The business portion of parking fees and tolls may be deducted in addition to the standard mileage rate. Since this method only requires you to track and substantiate your business miles driven and does not require you to keep track of your expenses (except for parking and tolls), you may find this method to be easier and more cost-effective. 

I recommend that you discuss this issue with your tax return preparer and consider having your corporation reimburse you for the business miles driven using the standard mileage rate discussed above.