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Lev
Lev, Tax Advisor
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Im an independant contractor courier, I take standard mileage

Resolved Question:

I'm an independant contractor courier, I take standard mileage which includes depreciation. I have 3 vans and a trailer that I use just for the buisness. Why can't I depreciate them out for the price I bought them for over the years. I think the depreciation they aloud is looked at as 1 vehical.
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.

You have an option to deduct

your actual travel expenses - that include all receipts, insurance, depreciation etc, or

use mileage rate.

 

You may select either method that provides you with better deductions.

Most people use mileage rate deduction because of simplicity.

Please see more details in the IRS publication - 463 - http://www.irs.gov/pub/irs-pdf/p463.pdf

If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Then in later years, you can choose to use either the standard mileage rate or actual expenses.

If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period. For leases that began on or before December 31, 1997, the standard mileage rate must be used for the entire portion of the lease period (including renewals) that is after 1997.

You must make the choice to use the standard mileage rate by the due date (including extensions) of your return. You cannot revoke the choice. However, in later years, you can switch from the standard mileage rate to the actual expenses method. If you change to the actual expenses method in a later year, but before your car is fully depreciated, you have to estimate the remaining useful life of the car and use straight line depreciation.

 

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22616
Experience: Taxes, Immigration, Labor Relations
Lev and 4 other Tax Specialists are ready to help you
Customer: replied 5 years ago.
I use one van mostly, others are back-ups withlittle mileage. So, why can't I depreciate them out because there's no mileage involved with them. The trailer only used once last year.
Expert:  Lev replied 5 years ago.

Generally - you may depreciate the property that is used for business - I agree,

however - if the property is just stay ""in case" and you do not use it - if the IRS would audit you- your deductions may be disallowed.

You may depreciate the property that you use in business - not the property that you actually do not use and use very little.

 

That doesn't mean - you can't deduct depreciation - you can - but you should be well prepared to justify the business use.

 

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