American Farriers Journal
American Farriers Journal is the “hands-on” magazine for professional farriers, equine veterinarians and horse care product and service buyers.
Drew Morales
If you use your vehicle for both business and personal purposes, you must divide your expenses between business and personal use. You can divide your expenses based on the miles driven for each purpose.
While both standard mileage rate and actual vehicle expenses are two great ways to get tax deductions, you can’t use them jointly or switch between the two. For example, if you choose to use the standard mileage rate for a year, you cannot deduct your actual expenses for that year except for business-related parking fees and tolls.
Also, if you want to use the standard mileage rate for a vehicle you own, you must choose to use it in the first year the vehicle is available for use in your business. In later years, you can choose to use either the standard mileage rate or actual expenses. If you use the standard mileage rate for lease, you must choose to use it for the entire lease period (including renewals).
Now that we have a basic knowledge of vehicle deductions, let’s look at a practical example. This will help you understand why tracking both deductions through the year is beneficial. Comparison will tell you which provides the best results for your practice.
You can choose either standard mileage rate or actual expense deduction, but the two cannot be used jointly or switched in between.
Smartphone apps can help track your mileage for tax reporting.
The percentage…