What are the tax write-offs for using my car as a PCA (Personal Care Assistant)?

So I actually help people with this exact situation! The answer depends on how your girlfriend is classified for tax purposes. If she's self-employed as a PCA (gets a 1099, not W-2), she can absolutely deduct vehicle expenses on Schedule C as business expenses. She'd have two options: 1) Standard mileage rate (65.5 cents per mile in 2023, probably higher for 2024) - she'd just need to track all miles driven for PCA work. 2) Actual expenses method - she'd track all car costs (gas, insurance, repairs, depreciation) and deduct the percentage used for business. If she's a W-2 employee of an agency though, these deductions aren't available anymore since the Tax Cuts and Jobs Act eliminated unreimbursed employee expenses.

I went through something similar with my dad's home care situation last year. I found this amazing service called taxr.ai (https://taxr.ai) that really helped me figure out all the PCA-related deductions we qualified for. They analyzed my specific situation and showed me exactly how to document mileage and expenses properly. They even created a custom expense tracking template for me that made tax time so much easier. What's cool is they specifically understand medical expenses and PCA situations - they knew exactly which forms we needed and how to maximize the deductions legitimately.

Just wanted to follow up about taxr.ai since I was skeptical in my earlier comment. I decided to give them a try for my situation (I'm a part-time caregiver for my uncle) and I'm actually impressed. They reviewed all my documentation and found that I'd been missing several deductions related to the transportation costs. They helped me set up a proper mileage log system that will stand up to scrutiny if I'm ever audited. The vehicle expense part was particularly helpful because I was incorrectly calculating depreciation. Not trying to sound like a commercial, just surprised that something actually delivered on what was promised.

If your girlfriend is getting paid through a medicaid waiver program, sorting out the tax situation can be a nightmare. I spent WEEKS trying to get through to the IRS last year to figure out how to handle my daughter's PCA expenses. Eventually I found Claimyr (https://claimyr.com) which got me connected to an actual IRS representative in about 20 minutes when I'd been trying for days. There's a quick video showing how it works here: https://youtu.be/_kiP6q8DX5c. The IRS agent I spoke with confirmed that as long as the PCA is self-employed (1099 not W-2), vehicle expenses used primarily for client transportation/errands qualify as business expenses on Schedule C. Saved me so much confusion and probably prevented me from making a costly filing mistake.

Well I'll be damned. I tried that Claimyr service mentioned above because our situation with the PCA payments is complicated, and I actually got through to a real person at the IRS in about 25 minutes. The agent went through the whole scenario with me and confirmed that since my girlfriend gets a 1099 (not W-2), she CAN deduct the business portion of vehicle expenses on Schedule C. They also warned me that we should keep a VERY detailed mileage log with the purpose of each trip because transportation expenses are apparently a red flag for audits. The agent even emailed me a link to their recommended mileage tracking format. Worth every penny just for the peace of mind of getting official answers instead of guessing.

One thing nobody's mentioned yet - make sure whoever is the PCA keeps track of all car-related expenses like gas, insurance, repairs, oil changes, etc. My sister is a PCA and she just takes photos of all receipts with her phone and logs the mileage in a simple app. Her tax person said documentation is super important especially if you ever get audited. Also, if you buy a new car mainly for this work, save all the paperwork because the percentage of business use can be deducted through depreciation.

I'm surprised nobody's mentioned that there might be a way to claim some of these expenses as medical expenses on YOUR tax return instead. If the transportation is primarily for medical purposes (getting to doctor appointments, pharmacy runs, etc.), and you itemize deductions, you might be able to deduct some car expenses as medical expenses on Schedule A. The threshold is high (expenses over 7.5% of your AGI), but worth looking into if your medical costs are already substantial.

Make sure you consider the impact of a car purchase on Medicaid eligibility if that's how your care is funded! My mom almost lost her benefits when she transferred money to help me buy a car for her transportation. The Medicaid worker said it looked like a gift/asset transfer which can trigger penalties. Had to provide tons of documentation showing it was for her medical transportation needs. Just something to watch out for!

Just want to add another perspective here - if you're thinking about purchasing a more fuel-efficient vehicle specifically for PCA work, you might also want to consider the timing of the purchase for tax purposes. If your partner is self-employed (1099), purchasing the vehicle late in the tax year could allow you to claim a larger depreciation deduction in that first year through Section 179 or bonus depreciation rules. However, this only works if the vehicle is used more than 50% for business purposes. Also, keep in mind that if you later sell the vehicle, you may have to "recapture" some of the depreciation you claimed, which gets taxed as ordinary income rather than capital gains. It's not necessarily a bad thing, but it's something to plan for. I'd definitely recommend running the numbers on whether the standard mileage rate or actual expense method works better for your specific situation before making the purchase decision.

This is such a helpful thread! I'm in a similar situation where I provide care for my elderly father and do a lot of driving for his medical needs. One thing I learned from my accountant that might be useful - if your partner is classified as self-employed for PCA work, she should also consider setting up a separate business bank account for all PCA-related expenses, including vehicle costs. This makes record-keeping much cleaner and provides better documentation if you're ever audited. Also, don't forget that if you do go the actual expense method route, you can deduct things like car washes if the vehicle is used primarily for business - my accountant said keeping the car clean and presentable is considered a legitimate business expense for client-facing services. Just make sure to keep receipts and note the business purpose!

One important thing to keep in mind - if your partner is receiving 1099s for PCA work, she'll also need to pay self-employment taxes (Social Security and Medicare) on that income, which is about 15.3% on top of regular income tax. The vehicle deductions can help offset some of this burden, but it's something to factor into your overall tax planning. Also, I'd suggest keeping a simple spreadsheet or notebook in the car specifically for logging business trips. Include date, starting location, destination, purpose of trip, and mileage for each business-related drive. The IRS likes to see contemporaneous records (meaning recorded at the time, not recreated later), so having this habit from the start will save you headaches if you're ever questioned about the deductions. If you do decide to purchase a new vehicle, consider looking at hybrids or electric vehicles - there may be additional tax credits available that could further offset your costs, especially if the vehicle qualifies for federal EV credits.