Double car

[biglight]

Self employed, own a car, use mileage reporting. When renting a car for business, am I required to do mileage reporting, because my own car uses mileage reporting? Can I do the actual expenses method on the rented car, and the mileage reporting on my own car?

[MindyB]

No, you are not required to use the mileage method for a rental car just because you use it for your personal vehicle. 

The IRS allows you to choose the deduction method independently for each vehicle you use, for business purposes. 

For short-term car rentals, you generally must use the actual expense method because the standard mileage rate is reserved for vehicles you own or lease long-term. This means you should deduct the specific costs of the rental fee, gas, and tolls rather than tracking miles. You can continue using the standard mileage rate for your personal car while simultaneously deducting actual expenses for your rentals. 

[biglight]

Thank you, that was a thoughtful and thorough answer.

I heard you say short term rentals have one rule, and long term rentals have a different rule.

What if I have a short term lease car, and a long term rental car? Your answer bundles long term with lease, and short term with rental, but they could be mix-matched.

I very much prefer the Mileage method for all cars.

Please link me to the official website that documents the cutoff between the two, thank you.

[CatinaT1]

The IRS treats every vehicle in your business independently. Your choice to use the Standard Mileage Rate for your personal vehicle does not "lock you in" to that method for any other vehicle you use. 

For your personal vehicle you will continue to track and report miles.

For a rental car, you track and report the actual dollars spent. It doesn't matter how long the rental was for. You deduct the actual rental fees + gas + tolls + parking. You cannot take the standard milage rate for a rental because that rate includes depreciation and you can't depreciate something you don't own. 

When you enter your Rental Car expenses, you can enter this as a Travel Expense OR Other Common Business Expenses.