@stech wrote:
I want to use sec 179, it would be higher
I started my business in 2022. Car was used partially (20%) business and 80% personal. Can I expense $7800 ($39K * 20%) cost of car as sec 179?
No. You can only use section 179 if the property is used at least 50% for business.
When you place used property in service in a business, your basis for depreciation is either the purchase price, or the present fair market value, whichever is lower.
Publication 463 discusses business use of a personal vehicle.
https://www.irs.gov/forms-pubs/about-publication-463
If you use the standard mileage rate, you deduct about 65.5 cents per mile of business travel. This includes built-in allowances for fuel, repairs, maintenance, insurance and depreciation. You need a mileage diary or log that shows the date, business purpose, and mileage of each business trip.
If you want to use the actual expense method, you must track all your vehicle expenses for the year -- fuel, maintenance, repairs, depreciation, and insurance. You can deduct the cost of electricity if you can prove it (that might be tricky). You must add up the total costs for the year. You must also have a mileage log or diary at shows the date, business purpose, and mileage of each business trip AND you must keep track of the total vehicle miles driven. At the end of the year, you figure the percentage of business miles, and deduct that percentage of expenses. If you use the actual expense method, one of your expenses would be regular 5 year depreciation, based on the fair market value of the car as a used car when you placed it in service in 2022.
Because of the difficult record keeping requirements, and the possible difficulty of getting accurate electricity costs that would stand up to audit, you might consider using the standard mileage method. Also note that, if you use the exact expense method, you use up the depreciation deduction after 5 years. With the standard mileage method, it always contains a depreciation component, which means if you keep the car for 10 years, you get 10 years of depreciation instead of 5.
