The per mile rate includes 26 cents per mile for depreciation, and you can also include the interest portion that you pay on the loan.
Most of my clients track their mileage, and I barely am able to get them to do that.
If your vehicle gets less than 20 mpg, it is usually better to claim depreciation plus expenses.
The IRS always come asking for documentation, so be prepared to keep track of your business drives and the who, where, when and why for each trip.
This spins my head right round baby right round…can our tax system be any more. complicated? I’m curious to know what other country’s income tax systems look like compared to US.
That rate is favorable for those who have lower cost and/or completely paid off vehicles.
Actual expense method is probably better for those with high payments or recently purchased vehicles.
Gotta crunch the numbers before choosing...once chosen, you're stuck until the next vehicle.
Your best investment is a good CPA. Depreciation + expenses was the way to go for me.