Does employer mileage reimbursement cover depreciation also or just gas, tires, maintainance, etc.?

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    The standard milaege rate is designed to cover all fixed expenses involved in owning and operating a vehicle and although the IRS does not specifically list each and every one of these expenses it does refer to some of the possibilities. It lists some fixed expenses as depreciation or lease payments, insurance, license and registration fees and personal property taxes

     

    In addition to the fixed expenses involved in owning a vehicle, milage rate is also designed to cover the variable expenses actually involved in driving those miles. Some examples of variable expenses are gasoline and the taxes on gasoline, oil, wear and tear on the tires and even the cost of routine maintenance and repairs. So basically, if you use the mileage option it is designed to cover all expenses involved in operating a vehicle. However, you may be eligible for additional deductions for parking fees, tolls, interest and taxes if they apply. You cannot use accelerated depreciation on your vehicle the first year and then switch to a mileage method the second year because the mileage method calculation includes straight line depreciation within its calculations.

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