Question

I have a question about the mileage deduction rules when filing a tax return. Should I use the standard mileage deduction or claim actual auto expenses?

Answer

To determine if you would benefit most from the standard mileage deduction or actual vehicle expenses you will have to review your specific circumstance. choice based on your specific situation.

Standard mileage is available unless:

  • You use more than five vehicles at one time for your business.
  • You claimed actual expenses after 1997 for a vehicle you leased.
  • You claimed actual expenses in the first year you used the vehicle for business.
  • You’re a rural mail carrier who received a qualified reimbursement.
  • You claimed a depreciation deduction other than straight-line depreciation for your vehicle in a prior year.

Both methods require you to keep track of:

  • Your business and personal mileage
  • The business purpose for all business mileage

If you use the actual expense method, you’ll also need to keep track of receipts for your vehicle’s:

  • Gas and oil
  • Maintenance
  • Interest paid
  • Other automobile expenses

Regardless of the method you use, you can claim the business percentage of these:

  • Personal property taxes paid
  • Any tolls and parking fees

If you’re self-employed, you can only deduct interest expenses and personal property taxes for your business auto expenses. These expenses aren’t permitted for employee vehicle expenses.

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