I have a sole proprietorship and take the mileage deduction. I will have a lot of taxes to pay on my income this year. Can I purchase a car and reduce my tax liability?

[Critter]

If you do that you need to use the actual auto expenses option so you can depreciate the vehicle.

[Hal_Al · Accepted solution]

Yes. But, then you can no longer use the standard mileage deduction, after using section 179 to write off the car  purchase. That is, you have the choice of 1. writing off the business percentage of the purchase cost (the car must be used more than 50% for business to use this option) and/or depreciating the cost or  2. using the standard mileage. You can't do both. If you choose 1, you will only deduct actual expenses, going forward (gas, maintenance, insurance, licenses).

References:

https://ttlc.intuit.com/questions/2941438-if-i-want-to-use-the-section-179-deduction-for-a-car-in-my...

https://www.mileiq.com/blog/switch-to-actual-expense-method/

https://turbotax.intuit.com/tax-tips/small-business-taxes/business-use-of-vehicles/L6hi0zzzh