Vehicle Questions

[Kaylala]

I opened in June of 2016 and after doing my taxes I found there was SO MUCH I missed. I want to be on top of it this year! So my question right now is about vehicle use.

1) Can you only claim depreciation on a newly purchased vehicle or can you claim it on ones you've already owned. If so how do I figure out the depreciation?

2) Do I need to keep track of my odometer readings when I use my vehicle for personal reasons as well as business or can I just track business and deduct that from the total at the end of the year?

3) I use 2 different vehicles, can I claim both of them or do I need to stick to one?

[TomCopeland]

Originally Posted by Kaylala

I opened in June of 2016 and after doing my taxes I found there was SO MUCH I missed. I want to be on top of it this year! So my question right now is about vehicle use.

1) Can you only claim depreciation on a newly purchased vehicle or can you claim it on ones you've already owned. If so how do I figure out the depreciation?

2) Do I need to keep track of my odometer readings when I use my vehicle for personal reasons as well as business or can I just track business and deduct that from the total at the end of the year?

3) I use 2 different vehicles, can I claim both of them or do I need to stick to one?

1) You can claim depreciation on a used vehicle. Take the number of business miles you drove divided by the total number of miles driven. That's your business percentage. Multiply it by the cost of the vehicle. If your business percentage was less than 50%, depreciate it over 5 years, using 10% for the first year. So if your business use % was 60% and the cost of the vehicle was $10,000, the business portion is $6,000 x 10% for the first year = $600. You can claim more than $3,160 in depreciation deductions in the first year.

2) You don't need to track odometer readings for business or personal trips. You just need to track the miles you drove for business purposes only. The rest are personal miles

3) You can use more than one vehicle for your business.

[Kaylala]

Thank you so much Tom! You are a huge help!