How does mileage & depreciation work?

1612 Views 4 Replies 4 Participants Last post by edrenckh, Jul 20, 2003

TurfPro

Discussion Starter · Jul 18, 2003

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?

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nelson279

· #2 · Jul 19, 2003

Originally posted by TurfPro
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?

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

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edrenckh

· #3 · Jul 19, 2003

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

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

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mtdman

· #4 · Jul 20, 2003

Originally posted by nelson279
You need to speak to a professional. In this case they are called ACCOUNTANTS:dizzy:

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.

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edrenckh

· #5 · Jul 20, 2003

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.

Otherwise...
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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