How does mileage & depreciation work?

Discussion in 'Business Operations' started by TurfPro, Jul 18, 2003.

  1. TurfPro

    TurfPro LawnSite Member
    Messages: 232

    Green In Idaho,this is for you ;)

    I am purchasing a new pickup and was wondering which way I should go... mileage or depreciation,,or "other".

    My question is ,can you depreciate a veh. out and then after that's done start claiming mileage?

    #2 I've heard of people leasing the veh to themselves via their business (or business leasing it to them I guess) and gain greater tax benefits.... is this true?
  2. nelson279

    nelson279 LawnSite Member
    Messages: 18

    You need to speak to a professional. In this case they are called ACCOUNTANTS:dizzy:
  3. edrenckh

    edrenckh LawnSite Member
    Messages: 135

    No. One or the other for each vehicle over the lifespan.
  4. mtdman

    mtdman LawnSite Gold Member
    Messages: 3,143

    I do believe Green in Idaho is an accountant.

    When I bought my truck, I went to my accountant and we figured it both ways. For the number of miles I put on my truck each year for the business, it came out better to do mileage. I am sure it's different for everyone, you need to sit down and calculate it both ways.

    If you are going to do mileage, you must separate the milage you put on for business purposes from your personal use. Best way is to keep a daily log. Get a notebook and write down daily mileage.

  5. edrenckh

    edrenckh LawnSite Member
    Messages: 135

    I'm not an accountant, but heres my two cents.

    If you use mileage, you get .36 per mile. That's it. You should have a log or some other way of accounting for mileage. Gas, oil, vehicle insurance, car washes, etc are "rolled" into the .36 cents.

    If the vehicle is 100% business, not need to log mileage.

    If you have a receipt, you must have went to the store and back. Go to map-quest and get the miles if you didn't log them. I log all my receipts, and then I have all the mileage for those trips.

    If you have a mowing route, the same every week, you may be able to just multiply the # of weeks by the mileage.

    Either way, you must be able to "substantiate" the miles. A mileage log will do it.

    The other way
    If you depreciate, you may do it all this year, with the new tax laws. Up to 100K I believe. Then you take all other expenses, gas, oil, insurance, washes, vehicle add-ons, maintenance, and deduct them. Some are depreciated if they are an improvement (i.e. a dump bed), others are expensed (wiper blades, cup holders, car detailing, washes, most things less than ~$200).

    Whichever method you choose, you have to stick with it over the lifespan of that vehicle. If you have two vehicles, you can use two methods, one for each.

    A used vehicle, one you already own, or a cheap vehicle probably best to use mileage. Lots of miles on a new truck may fall into this category.

    A new F350 4x4 diesel plow-truck, it may be best to use depreciation.

    Ease of capturing expenses may determine which method you use too.

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