Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Sec. 179 vs. Standard Mileage Rate

Posted by taxguru on March 19, 2009

Q:

Subject:  Re: section 179

Hi,

Thanks for your previous replies in the past. If you take a section 179 deduction can you still deduct  your businees mileage. O does the section 179 deuction fall under the itemised deductions therefore precluding mileage claims?

thanks

A:

You really need to be working with a professional tax advisor because you are mixing up different tax issues that are technically not connected.

As I have explained on several occasions, if you use Section 179 or any other accelerated method of depreciating a vehicle, you are required to use the actual cost method of calculating deductible vehicle expenses for that particular vehicle for as long as you own it.  You are not allowed to switch to the IRS’s standard per mile rate because that rate includes a portion for deprecation and to switch to it would end up giving you double deductions for deprecation.

The issue of the standard personal deduction versus Schedule A itemized deductions is completely separate from the issue of how the vehicle costs are calculated.  As always, it’s generally a good idea to keep track of all of your actual itemized deductions and use them on Schedule A if they are higher then the standard personal deduction.

I hope this helps; but you need to be working with a tax professional.

Good luck.

Kerry Kerstetter

 

Follow-Up:

Hi,

Thanks a lot.

 

 

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