Standard Mileage vs. Actual Vehicle Expense Deduction – Did You Know?
If you use your car, van or truck for business purposes, you can claim a vehicle expense deduction on your tax return. You may either use the standard mileage rate or report the actual expenses associated with business use of the vehicle. Actual expenses include gas, repairs, insurance and depreciation. Each expense must be prorated based on how much you use the vehicle for business rather than personal purposes, so extensive record keeping is required.
Claiming the standard mileage rate, on the other hand, requires only tracking the number of miles you drive for business purposes throughout the year. Simply multiply your yearly mileage total by the standard rate, which will be 58 cents per mile for 2019.
As a broad rule, the standard rate yields a larger deduction for fuel-efficient and older vehicles, whereas deducting actual expenses is advantageous for many newer vehicles. However, in order to be able to choose the method that gives you the largest possible deduction each year, you must use the standard rate for the first year that the vehicle is used for business.
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RTW Xxact Enterprises, LLC
4915 Hwy 138 Ste D Mailbox 3
Loganville, GA 30052
