Standard Mileage Rate May Actually be Better

You have the option of deducting your vehicle costs using the standard mileage rate or the actual vehicle expenses.

The standard rate may be more beneficial for individuals who have high mileage rates and low vehicle costs.

The standard mileage rate is used to figure the deductible cost of a vehicle that is owned or leased, and is written-off at a rate of 55 cents per mile driven (for 2009).

Using the standard mileage expense, you can deduct the cost of travel related to your rental activity, like trips to the hardware store, property inspections, tenant interviews, and rent collection.

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.

You might also want to read:

1. Tax Tip for Landlords, Property Managers and Property Management Companies – New Mileage Deduction for 2010 The Internal Revenue Service today issued the 2010 optional standard mileage rates used to calculate the deductible costs of operating an automobile for managing properties by landlords, property managers and property management companies Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 50 [...]......
2. Utilities used in Rental Activity are Deductible You are allowed to deduct the cost of utilities used in rental activity if they are ordinary and necessary. However, the IRS is strictly against mixing personal and business expenses. For example, a mobile phone used solely for rental activity is deductible, but the base rate on your primary telephone line is considered a personal expense and [...]......
3. SUV Tax Deduction – Buy a Hummer! There’s a loophole for vehicles like Hummers, and it’s huge. You can qualify for a $25,000 write-off if you purchased a vehicle weighing over 6,000 pounds and used it in your business. If your vehicle is a pickup with a bed length of over 6 feet, the limit is even higher, and you may be [...]......
4. Actual Expense Method – Auto Expenses You Can Actually Deduct | Vehicle Deduction Tax Tips Vehicle expenses paid exclusively for rental activity can be fully deductible. Using the actual expense method instead of standard mileage might be more beneficial if your vehicle incurred a lot of expenses during the year. Usually the largest vehicle expense that you can deduct is depreciation, which allows you to deduct the value of your vehicle [...]......

This entry was posted on Thursday, January 14th, 2010 at 12:15 pm and is filed under Schedule E. You can follow any responses to this entry through the RSS 2.0 feed.