I sold my 16 year old car and purchased a new car in June 2023. Both were used for business. It seems like the program is miscalculating the percentage of business use for both. For example, total mileage for car that was sold was 3700, and business miles were 1900, or over 50%. The program is also listing service months at 6 which is correct, but the calculation for business use is then halved and stated as 27%. Since this percentage is used for calculating other related expenses (ie. gas, percentage of repairs and maintenance), how do I fix this?
The business use is calculated by dividing total miles by business miles, then multiplied by months used for business divided by 12, so 27% business use is correct.
Since you stopped using the vehicle for business half way through the year, you would only be entitled to the business use % for your expenses too.
You could try using Standard Mileage this year to see if you get a better vehicle expense deduction.
Here's more info on Business Use of Car.
Thank you for your quick response Marilyn, and I get the logic! However, I did not own the car for 12 months of the tax year....only 6, so it's not calculating the correct percentages for other expenses, such as gas and repairs for that vehicle, does that make sense? How is that corrected?