# Question on actual expenses vs standard mileage deduction



## ANThonyBoreDaneCook (Oct 7, 2019)

During 2019/2020 I was renting out vehicles to ants. One of them hit me up with an interesting question and I was hoping to help her out.

She rented from me from the end of 2019 through 2020. She filed her taxes accordingly in both years simply deducting the rental cost, gas etc.. In 2021 she worked a w-2 job with zero IC work.

This year she purchased a cheap car that needed work. Looked like a decent deal imo. She wants to drive part-time on the side.

Would she be able to use actual expenses for 2022 if that proved to be advantageous over the standard mileage deduction? My immediate thought was "no" but I'm clearly no expert.

Thanks ants!


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## Seamus (Jun 21, 2018)

Yes but only the amount of the business use %. Keep in mind that if you use the actual expense method in the first year of car ownership she would lose the ability to switch in the future And becomes “locked in” to the actual expense method so she has to take a 5 year view of which is better. Also the depreciation method must be straight line.


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## ANThonyBoreDaneCook (Oct 7, 2019)

Seamus said:


> Yes but only the amount of the business use %. Keep in mind that if you use the actual expense method in the first year of car ownership she would lose the ability to switch in the future And becomes “locked in” to the actual expense method so she has to take a 5 year view of which is better. Also the depreciation method must be straight line.


Right got it.
I was confused if it was first year of the vehicle or business.
Thanks, that's what I thought.

I thought about asking you via PM instead of creating this post, but I figured with your new position you'd be crazy busy with paperwork, meetings and committee hearings.

Thanks.


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## Seamus (Jun 21, 2018)

ANThonyBoreDaneCook said:


> Right got it.
> I was confused if it was first year of the vehicle or business.
> Thanks, that's what I thought.
> 
> ...


It's good to ask in the tax forum as there is no doubt these tax issues pertain to all of us!


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## Daisey77 (Jan 13, 2016)

I agree with @Seamus . You can use either or the first year but if you use expenses you have to continue using the expense method every year while the vehicles is in service. Using mileage the first year allows you to switch back and forth the following years


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