# Standard mileage rate & Actual car expense



## shanyaoguipi (Mar 9, 2018)

Standard mileage rate & Actual car expense
Which one to choose?
Is there a difference between a low-end car（uber X) and a high-end car( SUV)?


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## UberHammer (Dec 5, 2014)

If you car actually costs as much or more than the standard mileage deduction, then you are seriously using the wrong car to do Uber.


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## UberTaxPro (Oct 3, 2014)

shanyaoguipi said:


> Standard mileage rate & Actual car expense
> Which one to choose?
> Is there a difference between a low-end car（uber X) and a high-end car( SUV)?


Everyone's situation is different however for most ride-share drivers using the mileage method works best.
Not sure what you mean by the 2nd question...?


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## Seamus (Jun 21, 2018)

shanyaoguipi said:


> Standard mileage rate & Actual car expense
> Which one to choose?
> Is there a difference between a low-end car（uber X) and a high-end car( SUV)?


As others have already said, for most the standard mileage is going to be better.

Small example: Don't factor in other expenses only comparables.

-assume FULL TIME driver
-assume car 100% used for ride share
-assume you bought a used *Pruis* in 2016 for $14,000 5 yr straight line depreciation.
-estimates can vary widely by geography and other factors.
-assume 40,000 miles per year

standard mile deduction = $21,800

actual deductions
gas. 2,300
insurance 1,700
depreciation. 2,800
total $6,800 so you would have to find $15,000 in car maintenance expenses just to equal the standard mileage deduction which is more than what you paid for the car! LOL

Expenses can vary greatly depending on car, geography, mpg, etc.etc.. But you get the point.

Also remember if you use the actual cost method you MUST also use it the following tax year.

Also remember there is a ceiling on allowable annual depreciation


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## UberTaxPro (Oct 3, 2014)

Seamus said:


> As others have already said, for most the standard mileage is going to be better.
> 
> Small example: Don't factor in other expenses only comparables.
> 
> ...


Also remember there is a section 179 deduction and bonus depreciation available if you use actual expenses. With actual expense method it's not necessarily the first year that's the problem, it's the years that follow due to depreciation recapture rules.


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