Mark Kohler explains when to use actual expenses versus the standard mileage deduction for business vehicles. Low-mileage cars that hold value benefit from actual expenses, while high-mileage vehicles like his daughter Sydney's 4Runner at 20-25k miles per year work better with the mileage rate, even if expensive.
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When you have low mileage on a vehicle, business mileage, you're going to want to lean towards actual because your deduction's lower, your value of the car is higher. So you want to be thinking through this going, hey, if I really want to write this vehicle off of my business and I'm going to spend some money for it and it's going to be lower mileage, I'm going to want to go actual. Conversely, I'm a realtor, man, I'm going to throw down on the mileage. It's going to take some, a beating, you know, I need a car that's cool. I mean, you got to look impressive as a realtor, I get it. My daughter Sydney, little shout out, Orange County, she's got an 4Runner. 4Runner. She has a 4Runner and it looks good. It's not too ostentatious, but it's also cool. It looks cool. It looks nice. So she's putting on a ton of mileage. I would not want her to take actual. Even if this 4Runner was $50 grand or whatever, I want her to go with mileage 'cause every year, man, she's getting hit with 20,000, 25,000 miles of business. We are going to milk that mileage deduction even though it's a higher value. So I think my takeaway here is you got to really figure out, am I going to put on a lot of miles in this car and how much do I want to spend on the car? Those are going to be driver's
