Prev Blog
<<

TaxTips about Vehicle Expenses

 Next Blog
>>
TReXGlobal Category: Business Strategies
Current Grade: A+
Total Views: 1643
Member Comments: 1
 Posted on: 07/03/2008
Posted by: TReXGlobal
Blog Points: 490
View all blogs >>
Is it Better to Use Actual Expenses or the Standard Rate?
You can deduct vehicle costs on your taxes using actual vehicle expenses or the standard mileage rate.
Actual Expenses: Standard Rate:
-Collect Receipts
-Write-Off Expenses that are Deductible		 -Log Mileage
-Deduct using Standard Mileage rate

The STANDARD RATE may be more beneficial for individuals who have a lot of mileage and low vehicle costs. Using the ACTUAL EXPENSE method is only better when your vehicle costs are very high.

The standard mileage rate is used to figure the deductible cost of a vehicle that is owned or leased. For Tax Year 2008, the IRS is allowing taxpayers to deduct 50.5 cents per mile driven for the first 6 months of 2008, and 58.5 cents per mile driven for the final six months.
FOR EXAMPLE
A person who spent $10,000 on gas but only traveled 10,000 business miles would want to use the Actual Expense Method because it can yield a larger deduction than the Standard Mileage Rate.
Actual Expense Method Standard Mileage Rate
$10K deduction for gas expense $5.85K standard deduction (10K * 58.5 Cents)
Use the Method that is most Advantageous!!!
A person who spent $5,000 on gas and traveled 20,000 business miles might benefit more from the standard mileage deduction.
Actual Expense Method Standard Mileage Rate
$5K deduction for gas expense $11.7K standard deduction (20K * 58.5 Cents)
Pay attention to specific rules about listed property, depreciation limits (which change often), and switching accounting methods. Whether using the standard mileage or actual expense deduction, be sure to track mileage and expenses related to your rental activity. You usually won't know which method to use until the end of the tax year, so it's best to just keep a good record of all vehicle activities.
RealTaxTips.com To learn how to take control of your Real Estate and Taxes, check out RealTaxTips at TReXGlobal.com.
Current Grade: A+
Category: Business Strategies
 Leave A Comment
AddThis Social Bookmark Button Social Bookmark
Vieving 1 - 1 out of 1 comments
JohnCorey
Ambassador
Posted By: JohnCorey on 07/05/2008
Another great article. Thanks for sharing the info.

[strong]John Corey [/strong]

Real Estate Investor (REI) with over 20 years of experience. Multiple states and countries; present portfolio spans 11 time zones.

[Color="blue"]Always open to answering questions. See the[/color][color="red"][em]contact page[/em][/color] [color="blue"]on my blog; link below.

[strong]Pay it forward[/strong].[/color] [link="http://www.ChelseaPrivateEquity.com/blog/"] www.ChelseaPrivateEquity.com/blog[/link]