USA Vehicle use questions regarding standard mileage vs actual costs

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Hi all,

I have a guy that has asked me a question in regards to how he should represent his business vehicles for tax purposes. The scenario is this:

  • He has a personal van that he has used for 70% of the time for this business in the current year.
  • He is buying a used work truck through his LLC this week.

My thinking is, for his van, he goes back through records and calculates the mileage, taxes, etc. and mileage and JUST USE the standard mileage deduction at $.565.
For this new (used) truck, he start off (thereby keeping this method) using the actual expense method. That way, he can take advantage of section 179, first year depreciation expense ($3,160 for used veh.) and actual usage expenses.

With having TWO work vehicles that he will have used in year 2013, can he use STANDARD MILEAGE on one and ACTUAL on the new one owned by the LLC??

I confused as to this quandary. Thanks for the help!!!
 

The Finance Writer

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What do you mean by "he goes back through his records and calculates his mileage?" He must have a contemporaneous mileage log to get any tax benefit from business use of a personal vehicle. Moreover, "buying a used work truck through his LLC" does not make the vehicle a business asset. His separate mileage log for that truck will determine its business use.

In answer to your question, a proprietor can have two vehicles used for business with one providing a deduction at the standard mileage rate and the other providing a deduction for the percentage of business use for actual expenses.
 
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Hi there,

In the scenario you described, where the person has a personal van used for 70% of the time for their business and is buying a used work truck through their LLC, it is possible to use different methods for each vehicle.

For the personal van, using the standard mileage deduction based on the business mileage is a common and straightforward approach. As you mentioned, the current standard mileage rate is $.565 per mile. The individual can calculate the total business mileage for the year, multiply it by the standard mileage rate, and claim that amount as a deduction for the van.

For the new (used) work truck owned by the LLC, using the actual expense method is a viable option. This method allows the individual to deduct the actual expenses associated with the truck's business use. This includes depreciation expenses (such as Section 179 and first-year depreciation), fuel costs, maintenance expenses, insurance, and other related costs. By using this method, the individual can take advantage of the specific deductions based on the actual expenses incurred.

It's important to note that the individual should maintain proper documentation and records for both vehicles' business use and related expenses to support their tax deductions.

To ensure accurate and personalized advice, it is recommended to consult with a tax professional or accountant who can review the specific details of the situation and provide guidance tailored to the individual's circumstances.

I hope this helps clarify the options for handling the tax representation of the business vehicles. If you have any further questions, please feel free to ask.
 

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