Eligibility to claim Section 179 Deduction and standard mileage or actual cost deduction for a newly aquired car.

[megs-jesuscowgir]

I will be purchasing a used car for business use before the end of this year. To enable myself to claim either standard or actual cost rate deduction in future years, I need to claim standard mileage rate this first year correct? Does this disqualify me from a Standard 179 Deduction however, if I claim standard mileage rate?

[Bsch4477]

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.

You can’t in addition take 179 depreciation. 

[megs-jesuscowgir]

So then @Bsch4477,  for the vehicle I am about to purchase, what benefit is the Section 179 Deduction for the purchase cost if I am then not able to do standard mileage rate deduction within the first year? Per your reply I need to use standard mileage rate during the first year of use in order to continue using this deduction correct?

[Bsch4477 · Accepted solution]

If you take a section 179 deduction you cannot use the standard mileage rate to calculate your car expenses. Also, if you claim either a section 179 deduction or use a depreciation method other than straight line in the first year the car is in service, you cannot use the standard mileage rate on that car in any future year. You need to use standard mileage rate during the first year of use in order to continue using this deduction

[Mike9241]

if you take section 179 (must be selected the first year the vehicle is place in service) then you have to use the actual expense method for all other expenses for the vehicle. You also have to use the actual expense method for all future years.  note 179 is not available if business use is below 50%. if during its depreciable life (actually  6 years - the year acquired and the next 5) if business use falls below 50% the 179 deduction is recaptured but you get an offset for the depreciation that would have been allowed if 179 was nor elected.