The catalytic converter is my Prius was stolen; car is in shop for new converter. I have to use a rental car for going to work. Is the rental car cost tax deductible?

Forum|Forum|3 years ago
November 26, 2022
2 replies
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The catalytic converter (CC) in my Prius was stolen 40 days ago. CC are on massive backorder in California. I have exhausted my insurance rental car coverage and now have to pay out of pocket. I need the car to commute to work. I would like to understand if the rental car cost can be tax deductible. Thanks!

TurboTax Online

DoninGA

Employee

Employee business expenses are not deductible on a federal tax return due to the tax code changes in effect for tax years 2018 thru 2025.

Casualty and Theft losses are not deductible on a federal tax return, unless the loss occurred in a federally declared disaster area.

LynnDee921

Quote: "Casualty and Theft losses are not deductible on a federal tax return, unless the loss occurred in a federally declared disaster area."

I'm fairly certain theft losses do not need to occur in a federally declared disaster area to be deductible on a federal tax return. I believe that's true only for personal casualty losses.

See

https://www.irs.gov/taxtopics/tc515#:~:text=Theft%20losses%20are%20generally%20deductible,through%20a%20claim%20for%20reimbursement.

Opus 17

Employee

@LynnDee921

Read the very top line of form 4684.

https://www.irs.gov/pub/irs-pdf/f4684.pdf

Opus 17

Employee

Commuting expenses are never deductible, before or after tax reform, for W-2 workers or self-employed.

If you are self-employed, you can deduct your work mileage whether you use your own car or a rental. You can't use the standard mileage rate for a car you don't own, so you would have to use the actual expense method, that would include the rental fees and fuel.

The difference between deductible work mileage and non-deductible commuting mileage is described in chapter 4 of IRS publication 463.

https://www.irs.gov/forms-pubs/about-publication-463