Yes, you can choose to switch back and forth between the standard mileage rate and the actual expenses method from year to year without penalty. Each year, you’ll want to calculate your expenses both ways and then choose the method that yields the larger deduction and greater tax benefit to you.
Some of the costs you can include in your Actual Expenses are:
- Lease payments
- Auto insurance
- Gasoline
- Maintenance (such as oil changes, brake pad replacements, tire rotations)
- New tire purchases
- Title, licensing, and registration fees (not deductible in all states; check with TurboTax to see if this expense is deductible in your state)
- Vehicle depreciation (use a depreciation table to calculate the amount, and then deduct only the portion that applies to the business use of your vehicle).
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