# Musings on IRS Standard deduction for mileage



## Disgusted Driver (Jan 9, 2015)

Over the years I have seen many people talk about the cost of driving and flat out insist it was .55 or so per mile, whatever the IRS rate was for the year. Then on the other extreme we have the gas only people who believe their only cost is the gas they put in their cars. Somewhere in between is the truth. Allow me to explain:

The IRS rate is meant to be a one size fits all method to account for business use of a vehicle that does not rely on actual cost and the associated record keeping that would be required. It's a gross generalization that applies to everything from Mercedes to old crown vics and everything in between. For most of us it should be well over what we actually spend to operate our vehicles for rideshare, allow me to give you an extreme example (PLEASE don't criticize me and say I can do better, of course you can, I just came up with this scenario to provide you a clear unequivocal example).

Lets assume that you buy a brand new Prius Two, drive it for 2 years and 100,000 miles only for rideshare and then throw the car away as worthless (yes, I know it's worth something and that only goes to further prove my point, read on).
Lets assume you get 50 miles to the gallon, spend $3.00 a gallon on gass, change the tires once, get a synthetic oil change for $70 every 10k miles, replace the wipers each year, pay 2K a year for insurance and 200 a year for registration and tax. 

What does it cost you to drive those 100K miles?
Car: 25,000 bottom line
Gas: 6,000
Tires: 500
8 oil changes: 560
2 Wipers: 80
Insurance 4,000
Tax & Reg 400

Total cost of ownership: 36,540 (36.54 cents per mile) 
Mileage deduction : 54,500 (IRS 54.5 cents per mile) 
Sheltered from income: 17,960 (income you are not paying tax on legally) 

This is a worst case scenario for a Prius, clearly the car will be worth something like 11 or 12K after 2 years based on kbb value (which would mean it cost you more like 25.5 cents per mile). I'm also assuming no other maintenance will be needed for the first two years. So clearly and even at the extreme of buying a brand new car to Uber in (which is a dumb idea for most of us) there is no way that it "costs' you 54.5 cents per mile to drive your car. On the other extreme, I don't really think I need to provide an argument for the people who think that it only cost them 6 cents a mile to drive (just gas). 

I've been driving a Toyota Avalon (2013) and have come up with the guesstimate of .33 cents a mile at $2.00 a gallon gas, at current prices I'm closer to .38 This is why I don't drive Uber X at base. 

I hope that I have helped to inform some people about their true cost of operation. So, let the arguments begin but please let keep it to logic!


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## GreatGooglyMoogly (Mar 2, 2018)

If you're dumb enough to destroy a new car that way you deserve to lose money.


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## Disgusted Driver (Jan 9, 2015)

GreatGooglyMoogly said:


> If you're dumb enough to destroy a new car that way you deserve to lose money.


So you absolutely missed the point of my post. I was not suggesting you buy a new car to drive with, I was making a logical argument as too why it doesn't cost you 54 cents a mile to drive as some people claim. Thanks for playing, read a few other threads as I mentioned and then perhaps you'll understand.


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## IERide (Jul 1, 2016)

I have tried suggesting pretty much the same thing (but with less detail), and was called names, so i no longer bother trying to educate the Know-It-All’s..


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## jfinks (Nov 24, 2016)

GreatGooglyMoogly said:


> If you're dumb enough to destroy a new car that way you deserve to lose money.


No big loss in destroying a POS Prius. lol


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## Older Chauffeur (Oct 16, 2014)

Disgusted Driver, here's what I posted in a thread called "Prius Love." Even though it was many years ago, it still supports your claim.
I posted this several years ago on PriusChat, IIRC. I'm now on my third Prius, a 2012 Plugin model. The second one was a 2006 on which I put nearly 60k miles, also with a lifetime average of 54.5 mpg. That's not the onboard computer number, which I find to be a little optimistic, but rather total gas I've put in the tank.
Notice that I include all operating costs, along with purchase price and depreciation, resulting in just over $0.21 per mile.


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