Several Vehicles

[Snaggletooth]

I have a customer who wants to go back and forth claiming mileage one year and actual expense another year. Also he has 3 vehicles used in business, and wants to pick and choose which ones can take mileage and which can take expense.

I think there are restrictions on this kind of behavior. What are they?

[Rapid Robert]

From TheTaxBook, answers.

Regarding 3 vehicles:

"Who cannot use the standard mileage rate method? The standard mileage rate method cannot be used if the taxpayer:

• Uses five or more automobiles at the same time for business, such as in a fleet operation."

"To use the standard mileage rate for a leased vehicle, the taxpayer must use the standard mileage rate for the entire lease period." (You didn't mention leased vehicles, but that doesn't mean much).

Regarding switching back and forth:

"To use the standard mileage rate for an automobile owned by the taxpayer, the standard mileage rate must be used in the first year the auto is available for use in the taxpayer’s business. In subsequent years the taxpayer can choose to use either the standard mileage rate or actual expenses."

There was also an exhaustive thread here in the last few weeks regarding switching back and forth and requirement to use standard mileage in the first year if one wants to switch to actual costs later.

[Snaggletooth]

Thank you Rapid Robert.

[MAJ]

Correct -

Up to 5 vehicles can use actual or mileage IF they used Mileage the first year.
If they used actual expenses the first year they must always use actual expenses.

He can switch until he's happy - IF he picked mileage the 1st year.

Examples:
Landscaper -
Has a dump body truck that he uses once a week versus the pickups he uses every day.
The repairs and gas on the 5 mile per gallon vehicles usually cost more than the mileage. But not all the time!
Or every few years the new engine and/or brakes take precidence.

No limits. Switch & enjoy!

[Lion]

Don't forget to account for depreciation.