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Which option is better -- the standard mileage deduction or the actual vehicle costs? |
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With the standard mileage deduction, you will be able to multiply all of the related business miles driven in a tax year by the applicable mileage rate for the tax year in question. The actual vehicle costs method can result in a higher deduction, as you may have incurred more expenditures than what is included in the standard rate. To calculate your mileage deduction using the actual cost method, you will need to determine the percentage of miles driven for business over total miles driven in the tax year. Next, you will multiply this percentage against all allowable deductions for your automobile -- gasoline, oil changes, registration fees, repairs, maintenance, depreciation and more. |
