I have a few rental properties. I have some questions for the auto expenses:
1) I bought a new car in 2021, how do I deduct the new car sales tax
2) the car 1 used for my rental expense for the past few years is totaled, so I will need to either use the car 2 we had or use the new car we bought. Can I stop using the car 1?
3) If I decide to use the new car, since the new car is used for the first year, is that true that I need to use standard mileage not the actual expenses.
4) If I decide to use car 2, I am not sure if I had used car 2 before, so can I use actual expense method for car 2?
5) How do I switch between standard mileage and actual expense methods?
Any help is greatly appreciated!
--Li
Note the Guidance:
Standard Mileage Rate
You can use the standard mileage rate only if you used this method the first year you began using your car for business. The standard mileage rate is an alternative for taxpayers who do not track their actual yearly vehicle expenses. If you qualify for the standard mileage rate, we'll multiply your business miles by 56 cents per mile.
Note the Guidance:
Standard Mileage Rate
You can use the standard mileage rate only if you used this method the first year you began using your car for business. The standard mileage rate is an alternative for taxpayers who do not track their actual yearly vehicle expenses. If you qualify for the standard mileage rate, we'll multiply your business miles by 56 cents per mile.
If you are allowed to use actual expenses, and want to do so, then you can wrap the sales tax into the purchase price of the new vehicle for purposes of your basis for depreciation.