Auto Expenses
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New Member

Auto Expenses

I purchased a vehicle new in 2014 and started using Actual expenses instead of Standard mileage method. At the time I read that I had to continue using Actual expenses for at least the first 5 years.  Can I now use the standard mileage method?

3 Replies
Employee Tax Expert

Auto Expenses

No, you can't use the Standard Mileage Rate for your business car. According to IRS Topic No. 510 Business Use of Car, if you used the actual expense method the first year you claimed the mileage deduction you cannot switch from the actual expense method to the standard method. 

 

To use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business.

  • Then, in later years, you can choose to use the standard mileage rate or actual expenses, whichever is higher. 

Additional information TurboTax FAQ: Can I switch between the standard mileage rate and actual expense method?

 

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New Member

Auto Expenses

Thanks for your quick response on Auto Expenses and the backup info.

 

Now I am trying to find how an auto that has been Partly depreciated for a few years is accounted for when it is sold or disposed of.  Some examples would be good.  Thanks again.

Employee Tax Expert

Auto Expenses

When you sell the vehicle, TurboTax will prompt you to enter the accumulated depreciation deducted for the vehicle. The program may provide you with the number also. Then, you will be asked for the sale price. Your gain or loss will then be calculated by subtracting the cost of the vehicle, net of the depreciation, from the sale price. You will have a taxable gain or deductible loss, adjusted for the business use percentage of the vehicle.

 

You need to access the Asset/Depreciation section for the business you are working on and edit the vehicle you disposed of to see the option for recording the sale of the vehicle. 

 

 

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