How can I use mileage vs actual exp, as in first year 2017? Wife drove only in 2021 and used actual expenses, but quit driving. How can I use mileage again in 2022?

[dale-bailey]

Turbo Tax is forcing me to use actual expenses, saying I used actual in first year of vehicle use; however, that is not true. I first drove rideshare in 2017 and used mileage that year. My wife drove rideshare only in 2021, and we both used actual expenses on our joint return. Only I will claim expenses for 2022, and intend to use mileage, as I did in 2017, first year of vehicle use. How can I file using mileage in 2022?

[ThomasM125]

From what I understand, you used the mileage allowance in 2017, then switched to the actual expense deduction method in 2021. You are correct, you should be able to switch back and forth between actual expenses and mileage allowance provided you used the standard mileage to begin with. I'm not sure why TurboTax would think you used the actual mileage allowance in year one, but I suspect that is what the issue is. One solution would be to delete the auto entry and re-enter it and then you can choose the mileage allowance in the current year. To do so, you would need to re-enter the asset and enter the date it was put into service for the business. You would have to verify that the prior year depreciation is correct so that the correct basis is recorded in TurboTax.

@dale-bailey 

{edited 4/4/23 at 1:01 PM PST}

[dale-bailey]

Dear Thomas the Tax Expert,

Both the IRS Schedule C Instructions and Turbo Tax guidance disagree with your answer.

-  IRS Schedule C Instructions state, "You can take the standard mileage rate for 2022 only if you: Owned the vehicle and used the standard mileage rate for the first year you placed the vehicle in service, ...." This guidance does not specifically address future years, but does imply switching between methods is allowed in future year. However, . . .

-  Turbo Tax states, under an article titled "Standard Mileage vs. Actual Expenses: Getting the Biggest Tax Deduction, Written by a TurboTax Expert • Reviewed by a TurboTax CPA, Updated for Tax Year 2022, February 2, 2023 04:34 PM" "If you want to use the standard mileage rate method in any tax year, you must do so in the first tax year you use your car for business. In later years you can choose to switch back and forth between the methods from year to year."

I'd be happy to read the source of your advice that switching is not permitted in future years after once using the actual expense method, even though mileage was used in the first year of vehicle use.

Thank you.

[ThomasM125]

Yes, you are correct, please see my original answer as edited. It appears that TurboTax may think you used the actual method in year one for some reason. One solution would be to delete the vehicle and re-enter it, using the orginal cost and date put into service. That way you should be allowed to use the standard mileage allowance in the current year. You would need to verify the accuracy of the prior depreciation number that TurboTax will calculate.