mileage and car expenses
Regarding the mileage deduction for non-reimbursed travel expenses,
is it correct that I can, in addition to the 40.5 cents per mile
driven, also write off the interest the bank has charged me in 2005,
on the financed vehicle? Thank you.
Tom,40½ cents per mile for the period from Jan. 1 through Aug.
31, 2005, and
For 2005, the standard mileage rate for the cost of operating your
car for business use is:
48½ cents per mile for the period from Sept. 1 through
Dec. 31, 2005.
If you use the standard mileage rate for a year, you cannot deduct
your actual car expenses for that year. You cannot deduct depreciation,
lease payments, maintenance and repairs, gasoline (including gasoline
taxes), oil, insurance or vehicle registration fees.
If you want to use the standard mileage rate for a car you own,
you must choose to use it in the first year the car is available
for use in your business. Then in later years, you can choose to
use either the standard mileage rate or actual expenses. (However,
your depreciation deduction would be figured differently if you
had used the standard mileage rate in an earlier year for the same
car). If you want to use the standard mileage rate for a car you
lease, you must use it for the entire lease period.
If you are an employee, you cannot deduct any interest paid on
a car loan. This applies even if you use the car 100 percent for
business as an employee and whether you use actual expenses or the
standard mileage rate.
However, if you are self-employed and use your car
in your business, you can deduct that part of the interest expense
that represents your business use of the car even if you use the
standard mileage rate. For example, if you use your car 60 percent
for business, you can deduct 60 percent of the interest on Schedule
C (Form 1040).