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Returning Member
posted Feb 4, 2020 11:44:34 AM

Can I use actual deductions on one work vehicle and standard mileage deductions on another, in the same tax year?

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2 Replies
Expert Alumni
Feb 4, 2020 12:13:44 PM

Yes, you can.  

 

The IRS offers two ways of calculating the cost of using your vehicle in your business:

  1. The Actual Expenses method or
  2. Standard Mileage method. To use the standard mileage rate, you must keep a log of each trip with miles driven during the first year your vehicle is used for business. After that, you can either go with standard mileage or actual cost (unless you lease, in which case you must stick with standard mileage for the duration of the lease).

Each method has its advantages and disadvantages, and they often produce vastly different results.

 

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.

 

 

Not applicable
Feb 4, 2020 12:32:29 PM

employee tax expert is wrong.  there is a rule that can prevent you from switching back and forth each year for a vehicle. 

 

 

If you want to use the standard mileage rate method, you must do so in the first year you use your vehicle for business. In later years you can choose to switch back and forth between the methods from year to year without penalty. 

 

if you use actual expenses the first year, you can not switch back to the standard mileage method.  

 

 

from IRS publication 510

Standard Mileage Rate - For the current standard mileage rate, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses or search standard mileage rates on IRS.gov. To use the standard mileage rate, you must own or lease the car and:

 

You must not operate five or more cars at the same time, as in a fleet operation,
You must not have claimed a depreciation deduction for the car using any method other than straight-line,
You must not have claimed a Section 179 deduction on the car,
You must not have claimed the special depreciation allowance on the car, and
You must not have claimed actual expenses after 1997 for a car you lease.

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.

For a car you lease, you must use the standard mileage rate method for the entire lease period (including renewals) if you choose the standard mileage rate.

Actual Expenses - To use the actual expense method, you must determine what it actually costs to operate the car for the portion of the overall use of the car that's business use. Include gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments) attributable to the portion of the total miles driven that are business miles.

Note: Other car expenses for parking fees and tolls attributable to business use are separately deductible, whether you use the standard mileage rate or actual expenses.