Is it better for my tax return to claim the low mileage or take the depreciation of my vehicle off

[Coleen3 · Accepted solution]

There is no way to answer that question as there are too many variables. The only way is to work through the interview and the program will tell you which gives you a better deduction. However, there are some facts that might help you decide.

To take the standard mileage deduction for business, you can't:

• Operate more than four vehicles at the same time, as in a fleet operation.
• Claim a depreciation deduction on the car (other than the straight-line method).
• Claim a Section 179 deduction on the car.
• Claim a special depreciation allowance on the car.
• Have claimed actual expenses after 1997 for a leased car.
• Be a rural mail carrier who received a "qualified reimbursement."

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.  If, in the first year, you begin with actual expenses, you must use this method for the life of the vehicle.

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.