Mileage or depreciation?

[southwestform]

Generally, over the life of owning a car, do you gain more of a deduction from taking mileage or depreciation? I just purchased a new car in November and am looking for any advice on this. I use it for both business and personal, though only about 20% for business.

Thanks.

[henryclay]

Once you begin an actual expense routine on a vehicle it is locked in. On the other hand if you drive 15,000 miles a year, 20% of that is 3,000 miles. At 50 cents a mile that is a $1,500 tax deduction. After a few years of $1,500 tax deductions and no further bookkeeping requirements it compares favorably with having to recapture the depreciation and pay taxes on it when you replace the auto. But the choice is ultimately yours to make.

In either event, a contemporary, regularly kept up, record of business use of the vehicle is almost a life saving measure. It is also one of the most highly paid jobs in existence. I mean, , , how long does it take to write down the speedometer reading before starting and after making a business use of a car? And if each few seconds of data entry time, (maybe a whole minute), save onloy a dollar, that's maybe a $60.00 per hour undertaking.

Why do so many people try to wing it instead?

Good luck.

[nancy65]

Unless the vehicle is 100% business use, you are almost sure to come out ahead by taking mileage. And with much less bookkeeping work to do for it.

[TheOtherMe]

No vehicle is used 100% for business.

[commentator]

By the way, the standard mileage rate includes a depreciation component which reduces basis. For a low business percentage auto that is not likely to result in a gain upon sale. However, if a gain is realized, depreciation has to be recaptured.

[southwestform]

so my previous car that I had since 2006 was used part time for my business, by part-time, I mean maybe 1,200 miles a year.

Since I sold it back in December, do I need to do anything particular on my forms or just show that it was sold and a new car purchased?

Thanks.