Don’t Overlook Standard Mileage Rate Add-Ons

15 February 2017
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Business owners and employees often use the standard mileage rate when taking a deduction for the business use of their vehicle. The standard mileage rate is determined annually by the IRS by using data based on the prior year’s costs. For 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) is 53.5 cents per mile for business miles driven, down from 54 cents for 2016. Operating expenses include:

  • Gasoline
  • Oil
  • Lubrication
  • Repairs
  • Vehicle registration fees
  • Insurance
  • Straight line depreciation (or lease payments)

What business owners using the standard mileage rate frequently overlook is that parking and tolls, as well as state and local property taxes paid for the vehicle and attributable to business use, may be deducted in addition to the standard mileage rate.

Regardless of whether the standard mileage rate or actual expense method is used, a self-employed taxpayer may also deduct the business use portion of interest paid on an auto loan on their Schedule C. However, employees may not deduct interest paid on a consumer car loan.

If you have questions related to taking a tax deduction for the business use of your vehicle, please give Dagley & Co. a call.

 

 

 

 

 

 

 

Image via public domain