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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4012
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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Hello. I used my personal car for business. On schedule C I

Resolved Question:

Hello. I used my personal car for business. On schedule C I did used standard business miles expenses. At the same time I used S/L method for depreciation for car accordingly. I know that I cannot use two methods for car expenses, but I think I can use depreciation with miles expenses when I use S/L method. Please explain me in what case I can use depreciation? thank you.
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

NPVAdvisor :

Hi, (please don't shoot the messenger here, but you can only use depreciation as a part of the ACTUAL EXPENSE method) ...

NPVAdvisor :

Using the Actual Expenses Method


 


Certain vehicle-related amounts you spend can be used to determine your actual expenses. Vehicle expenses include:


 



  • Depreciation

  • Insurance

  • Registration and license plate fees

  • Parking fees and tolls

  • Garage rent

  • Lease payments

  • Repairs and maintenance (including tires)

  • Gasoline and oil

  • Car washes


The maximum depreciation deduction allowed may be limited due to the IRS passenger automobile rules.

NPVAdvisor :

.

NPVAdvisor :

If you use the mileage method, the depreciation and all of those other expenses are essentially aeraged to get to the allowed mileage rate

NPVAdvisor :


If you elect to use the standard mileage deduction, you may deduct 55.5 cents for business purposes and job searching (in a related field). If you move to a new home because of a job change, the mileage rate while moving is 23.5 cents per mile (these miles are deducted on Form 3903, Moving Expenses, if you meet the moving deduction requirements).

NPVAdvisor :

sorry fpr the typo "averaged," taken into consideration to get to the 55.5 cents per mle

NPVAdvisor :

Hang on a sec and I'll get the actual IRS documentation onit for you

NPVAdvisor :

Here ya go ... form: http://www.irs.gov/taxtopics/tc510.html

NPVAdvisor :

You can generally figure the amount of your deductible car expense using one of two methods: the standard mileage rate method or the actual expense method. If you qualify to use both methods, before choosing a method, you may want to figure your deduction both ways to see which gives you a larger deduction. For the current standard mileage rate, refer to Publication 463, Travel, Entertainment, Gift and Car Expenses, or search standard mileage rates on IRS.gov. If you use the standard mileage rate, you can add to your deduction any parking fees and tolls incurred for business purposes.


To use the standard mileage rate, you must own or lease the car and:



  • You must not operate five or more cars at the same time, as in a fleet operation,

  • You must not have claimed a depreciation deduction for the car using any method other than straight-line,

  • You must not have claimed a Section 179 deduction on the car,

  • You must not have claimed the special depreciation allowance on the car,

  • You must not have claimed actual expenses after 1997 for a car you leased, and

  • You cannot be a rural mail carrier who received a "qualified reimbursement."

NPVAdvisor :

Hope this helps

NPVAdvisor :

Lane

Customer:

OK how about line two You must not have claimed a depreciation deduction for the car using any method other than straight-line,

NPVAdvisor :

Hopefully rate my answer based on the accuracy and thoroughness, rather than any good news/bad news content ... My hope is having all the facts will help you see around some corners

NPVAdvisor :

Right, that's IF you use actual expenses

NPVAdvisor :

Again depreciation is one of the ACTUAL expenses ... compensates you for depleton (wear and tear, however you wan to put it) on the car ... Mileage rate has that and all the other stuff built into it

NPVAdvisor :

YOu can't do both

Customer:

OK I have to research it because I think I cannot use any methods, except S/L

NPVAdvisor :

There IS one place where you can do al little add-in, and that's if you use the standard mileage rate, you can add to your deduction any parking fees and tolls incurred for business purposes.

Customer:

Thank you I need more time for research. I remember H&R Block class teacher told us that we could use milage and S/L

NPVAdvisor :

Actually MACRS is required for most property

NPVAdvisor :

See this:

NPVAdvisor :

MACRS assigns each type of business asset a "class" and specifies the time period over which you can write off assets in each class. The most commonly used items are classified as shown in the chart that follows.









































Class of PropertyItems Included
3-year propertyTractor units; racehorses over two years old placed in service after 2013; racehorses of any age place in service after 2008 but before 2014; horses over 12 years old when placed in service; any assets used in hog breeding.
5-year propertyAutomobiles; taxis; buses; trucks; computers and peripheral equipment; office machinery (faxes, copiers, calculators etc.); any property used in research and experimentation. Also includes breeding and dairy cattle, goats and sheep.
7-year propertyOffice furniture and fixtures; grain storage assets; and any property that has not been designated as belonging to another class.
10-year propertySingle-purpose agricultural or horticultural structures, and trees or vines bearing fruit or nuts; assets used in printing.
15-year propertyDepreciable improvements to land such as shrubbery, fences, roads, and bridges.
20-year propertyVessels, barges, tugs, similar water transportation equipment; farm buildings that are not agricultural or horticultural structures.
27.5-year propertyResidential rental property.
39-year propertyNonresidential real estate, including home offices. (Note: the value of land may not be depreciated.)

NPVAdvisor :

Hope this helps

NPVAdvisor :

If this HAS given you enough information, I would appreciate either an “accept” or a feedback rating of 3 (OK) or better. That's the only way they will pay us here.

NPVAdvisor :

HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question.


 

NPVAdvisor :

Thanks

NPVAdvisor :

Lane

Expert:  Lane replied 1 year ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.
Expert:  Lane replied 1 year ago.

Hi Alexander,

... just checking back in.

Let me know if you need more on this.

I'd appreciate an "accept" or positive feedback. (That's the only they'll pay me for my time).

But again, if you need more on this, please let me know.

Thanks,
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4012
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 3 other Tax Specialists are ready to help you
Expert:  Lane replied 1 year ago.
Hi Alexander,


I'm just following up with you to see how everything is going. Did my answer help?


Let me know,
Lane
Expert:  Lane replied 1 year ago.

Thank you sir.



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To ask for me again, just go here: NPVAdvisor



And enter your question in the question box



Thanks again,

Lane



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