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Farm Income - Car and Truck Expense

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Question
Farm Income - Car and Truck Expense

Answer
You can deduct the actual expenses of operating your car or truck or take the standard mileage rate. You must use actual expenses if you used your vehicle for hire or you used five or more vehicle simultaneously in your farming business (such as in fleet operations). You cannot use actual expenses for a leased vehicle if you previously used the standard mileage rate for that vehicle.
You can take the standard mileage rate only if you:
  • Owned the vehicle and used the standard mileage rate for the first year you placed the vehicle in service, or
  • Leased the vehicle and are using the standard mileage rate for the entire lease period (except the period, if any, before 1998).
If you take the standard mileage rate:
  • For miles driven BEFORE July 1,  multiply the number of business miles driven by 51 cents. For miles driven AFTER June 30, multiply the number of business miles driven by 56.5 cents, and
  • Add to this amount your parking fees and tolls.
Do not deduct depreciation, rent or lease payments, or your actual operating expenses.
If you deduct actual expenses:
  • Include the business portion of expenses for gasoline, oil, repairs, insurance, tires, license plates, etc., and
  • Do not include depreciation and rent or lease payments.
If you claim any car or truck expenses (actual or the standard mileage rate), you must provide the information requested on Form 4562 Depreciation and Amortization.

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Views: 263 Created on: Jun 15, 2013
Date updated: Nov 13, 2014

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