Standard Mileage Vs Actual Expense: Which Is Better?

standard mileage, actual expenseTax time is here. Did you know you can deduct car-related expenses on your taxes if you use your vehicle for work-related errands? For VW and Audi owners, you might be able to deduct overhead costs like maintenance and gas. To take advantage of the write-off, you have two options: standard mileage and actual expense.

Standard Mileage

The standard mileage deduction is the simpler and more common of the two options. To determine deductions, simply multiply the total miles driven by the standard mileage rate (SMR). As of the first half of 2019, the SMR is 58 cents per mile. The rate, however, frequently changes. With standard mileage, you usually cannot deduct actual auto expenses, such as repairs.

Actual Expense

With actual expense, you can only deduct expenses related to business use. So, if you use your car for business ventures 50% of the time, then you can only deduct 50% of expenses. This is actually the method you must use if you own a collection of fleet vehicles. It’s also the option for those who have a leased vehicle and plan to use actual expense for the entire lease duration.

Should I Use the Standard Mileage or Actual Expense Deduction Method?

Buttera Motors is not an accounting firm. You need to speak with a certified tax preparer to make the determination. Generally, standard mileage is better if you drive a lot and your vehicle gets great mileage. Actual expense may be more beneficial if your vehicle has low mileage and high operating expenses. Trucks and RVs typically fall under this category.

Keep Track of Repairs at Buttera Motors

Be sure to save your invoice for maintenance of your Audi or VW vehicle. Regardless of the deduction method, you will need to submit documentation. Your personal driving habits will determine whether the standard mileage or actual expense method offers the most cost-effective deduction.

German Automobile Maintenance

VW and Audi service in Bothell, Bellevue, Kirkland, Kenmore, Redmond & Woodinville