Depreciate a vehicle and use standard mileage (instead of Actual)

hameshatumko
hameshatumko Member Posts: 3 Newcomer
in General

Hi,

I purchased a ~$40k Tesla Model 3. I used it for ~60% for the business and ~40% personal. Ideally, I want to use the standard mileage for expenses and use the purchase cost to depreciate the vehicle. How do I do that? I hope that I am not stuck with Actual Mileage method to be able to depreciate the vehicle each year for business.

Thanks!

Answers

  • RyanZ
    RyanZ FreeTaxUSA Agent Posts: 78

    When it comes to deductible vehicle expenses, you may claim EITHER the Standard Mileage Rate (SMR) or the Actual Expenses, NOT BOTH. If you want to use the SMR in a future year, you must elect to use the SMR for the vehicle in the first year placed in service.

    For detailed information, please see IRS topic no. 510, Business use of car https://www.irs.gov/taxtopics/tc510 and IRS Publication 463 https://www.irs.gov/publications/p463

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