mileage for a vehicle not owned by me.

[gwj44]

I’m and independent contractor using a car leased by the company. I drive for the company and I pay for the gas. Can I deduct mileage?

[Vanessa A]

No.  You would not be able to deduct mileage because mileage includes the costs of things like gas, insurance, depreciation, tires, oil changes, etc.  However, you would be able to deduct your actual gas expenses.  To do this, you would go to vehicle expenses in the business expense section and then start entering the information about the vehicle, then when asked if you own the vehicle say "This vehicle isn't mine"  You will then be able to deduct your actual expenses incurred while using the vehicle.  

[gwj44]

How would I track the gas used for business vs personal. Is there a formula? Suggestions please

[Vanessa A]

So you use the company vehicle for personal use as well?  Did you save your gas receipts and track your milage?  If you fill the tank, and it costs $75, and you get 400 miles to a tank, then the cost per mile would be .1875.  So, if you fill the tank and drive 100 miles for work and 300 for personal then you would say you spent $18.75 on gas for that tank. 

This is not the same as deducting the standard mileage as that is $.65 per mile. 

[Andretti92]

What about if you are using a rental car for a month? I'm paying for the rental, I have my own car insurance which covers me, and I also got the damage waiver (insurance from the rental company). Gas too. I know I'm not performing maintenance tasks and repairs but I am using it for my self-employed business which I commute all over the place.

If not it would kind of stink to miss out on a months worth of deductions just because my car is in the shop!

[Opus 17]

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@Andretti92 wrote:

What about if you are using a rental car for a month? I'm paying for the rental, I have my own car insurance which covers me, and I also got the damage waiver (insurance from the rental company). Gas too. I know I'm not performing maintenance tasks and repairs but I am using it for my self-employed business which I commute all over the place.

If not it would kind of stink to miss out on a months worth of deductions just because my car is in the shop!

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You can't use the standard mileage method for a vehicle you don't own.  You must use the actual expense method.  See publication 463.

https://www.irs.gov/forms-pubs/about-publication-463

In this case, that means you must keep track of all your expenses for the rental car (the rental fees, gas and anything else) and you must keep a log of your mileage (date, purpose of trip, mileage) for both personal and work trips.  Then deduct the percent of actual expenses that matches the percent of business use.

Also note that if the rental period is more than 30 days, and the car has a value higher than a set amount (a luxury car) there are some limitations.  See the "inclusion rule" in publication 463.

[AmeliesUncle]

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@Opus 17 wrote:

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You can't use the standard mileage method for a vehicle you don't own.  

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Sure you can.  Publication 463 even has a paragraph about using it for a lease.

Although in many cases using Actual Expenses for a leased/rented car will have a better deduction.

[Opus 17]

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@AmeliesUncle wrote:

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@Opus 17 wrote:

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You can't use the standard mileage method for a vehicle you don't own.  

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Sure you can.  Publication 463 even has a paragraph about using it for a lease.

Although in many cases using Actual Expenses for a leased/rented car will have a better deduction.

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OK, but I think of a lease as more of a form of ownership.  I don't think a short-term rental would qualify.  And the thread originally started with a taxpayer who was paying for gas for a vehicle they drove but where a different entity was the lessor. 

[AmeliesUncle]

There is no restriction against a short-term rental.

And I am not aware of anything the indicates a lease is a form of ownership [Edit: well, REALLY long term leases like 30+ years may have a form of ownership].  "Rent" and "lease" are the same thing, but "lease" is often used for longer-term rental situations.

For the original poster, I'm not sure who "the company" is, so I can't comment on that (my first impression is his client is paying for a leased vehicle and letting him use it, in which case I agree he can't use the Standard Mileage Rate).

[Andretti92]

Ok thanks. The actual expenses of the rental cost may provide a better deduction, but I do drive A LOT for my business so I'll have to see what it comes out too in the end.  I use Quickbooks for tracking my mileage and just edit the trips that are messed up.