Dear Friend,Hello and welcome. Thank you for providing us an opportunity to help.
To depreciate and take actual expenses OR use mileage ? This is a question most small business owners encounter and there is no easy answer to this in some situation.However, in your case, the straight forward answer would be YES-- It is better to take actual expenses and depreciate the vehicle given the high amount of use.
However, there are few things you need to know. This method -- i.e. depreciating and claiming actual expenses requires more accurate record keeping.If you're using the actual expense method you can deduct all the expenses of operating the vehicle. That includes gas, repairs, insurance, lease payments, depreciation, etc. But you'll have to maintain records and keep the receipts of all the expenses. If you lose the receipts for , say for example, gas expenses in a month ? If you're audited the IRS can disallow the expenses. And if you're audited there's a very high probability the IRS will ask for your car logs, expense documentation, etc. for all business vehicles. Agents know most taxpayers are lax in this area and most of the time an agent is almost guaranteed to disallow some deductions.Secondly, you can only deduct the portion of the expenses incurred for business use
If you can take care of this, then yes, claiming depreciation and other actual expenses is certainly a better option in your case.
I hope this helps.. You may please rate this positively if this helps or revert with a reply if you need further assistance.Warm Regards,