 So standard mileage rate. So you may be able to use the standard mileage rate to figure the deducted costs of operating your car, van, pickup or panel truck for business purposes. The business standard mileage rate for January 1st, 2022 to June 30th, 2022 is 85.5 cents per mile. The business standard mileage rate from July 1st, 2022 to December 31st, 2022 is 62.5 cents per mile. So it's half the year and half the year that's a little bit messy to calculate, but not too bad noting and remembering that these rates are different when you think about a standard mileage rate for the business use than other things you might use a standard mileage rate because they're different parts of the code. For example, medical mileage rate for driving your car for medical purposes on the Schedule A deduction or charitable contributions may have similar kind of concepts of a mileage rate, but they may be different in amount because sometimes those other ones aren't keeping up with inflation to the same degree. Caution, if you choose to use the standard mileage rate for a year, you cannot deduct your actual expenses for that year except for business related parking fees and tolls. So in other words, if you're using the mileage rate, you can't also deduct, for example, the gas. You may be able to still deduct the parking fees and tolls, but you're quite limited. You can't do both otherwise you would be double dipping if you deducted like gas and the mileage rate. So choosing the standard mileage rate, if you want to use the standard mileage rate for a car or truck you own, you must choose to use it. In the first year, the car is available for use in your business. Here we come with the restrictions in terms of the IRS wanting some consistency in the methods being used. In later years, you can choose to use either the standard mileage or rate or actual expenses. So no one reason for that might be like they're basically saying, so once again, if you want to use the standard mileage rate for a car or truck you own, you must choose it and the first year of the car is available for use in your business. And so that means you can't use the direct, I mean the direct right off method and then switch to the mileage method after that first year of business. And one reason that might be is because you can imagine in these situations where they have these accelerated depreciation methods which may be limited for an automobile, but like a 179 deduction, you're already using a double declining balance for depreciation of the car, which is a front loaded depreciation, more depreciation at the beginning than the end of the life and special depreciation methods. You can imagine people would want to then in the first year of operations, take that accelerated depreciation and then switch over to the mileage method which might be higher after the depreciation has already been consumed in the first year with these accelerated depreciation methods. You can imagine that's probably what they're trying to avoid happening here saying, no, you can't do that. You have to, if you want to use the mileage method, you've got to use it, you've got to use it starting in the first year. That means that you might come out to a situation where the actual method is higher than the mileage method in the first year, possibly because of accelerated depreciation, but you also want to think what's going to be the best method over the life of the vehicle, which can be a little bit more confusing to calculate when you're trying to determine which method to use. And in any case, if you choose to use the standard mileage rate for a car, you lease, you must use it for the entire lease period. So now we're talking about a leasing situation, including renewals. So standard mileage rate not allowed. You cannot use the standard mileage rate if you one, operate five or more cars at the same time. So now you're not using like your car, you got five or more in operation. So they're gonna say, you need to not do the standard mileage rate in that case. Two, claim a depreciation deduction using any method other than straight line. So for example, the acres and the makers. And notice the straight line would be a depreciation method where you're allocating like the same amount of depreciation over a certain timeframe. Usually people use like a makers, which is an accelerated timeframe. And again, the idea would be that if you use an accelerated depreciation, they're concerned that you're gonna be overstating the depreciation one year, getting a big expense, and then switching to the mileage method. So you're kind of double dipping. That's kind of the issue. So three, claim a section 179 deduction. So that's the same issue I was talking about why you can imagine they would limit that because if you were able to take a 179 deduction, which is an accelerated depreciation in year one, and then switch to a mileage method after that, then you would have got this big deduction in year one because they accelerated the depreciation so you would think they wouldn't want you to do that. Claim the special depreciation, same thing. That's a huge lump sum depreciation in the first year. Five, claimed actual car expenses for a car you leased. Or six, are a rural mail carrier who received a qualified reimbursement. So that's kind of a more specialized area for you rural mail carriers out there. Parking fee, but obviously if you got reimbursed, that would, you got reimbursed. So you would think that it wouldn't be an expense because you got room. So parking fees and tolls. In addition to using the standard mileage rate, you can deduct any business related parking fees and tolls. Parking fees you pay to park your car at your place of work are non-deductible commuting expenses. So actual expenses. If you do not choose to use the standard mileage rate, you may be able to deduct your actual car or truck expenses. Tip, if you qualify to use both methods, figure your deduction both ways to see which gives you a larger deduction. So that might happen, for example, in the first year of you putting the car on the books, you wanna figure which would be better. But remember, it's not just the first year you're dealing with because you're kind of locked in to the methods at least to some degree that you're gonna pick. So you wanna think about multiple years, what's gonna be best. Actual car expenses include the cost of the following items. So if you're doing the actual expenses instead of just using the mileage rate where you would ask someone for their total mileage, miles and so on, and in essence multiply that times the rate, we have to get all the actual stuff which is depreciation, which means we have to put the car on the books as a fixed asset and use depreciation methods to depreciate it. You got the garage rent, gas, insurance, lease payments, licenses, oil, parking fees, registration, repairs, tires, and tolls, all this car related stuff. So if you use your vehicle for both business and personal purpose, you must divide your expenses between business and personal use. That's where it gets messy. So you can divide your expense based on the miles driven for each purpose. So you could take like a ratio of some kinds. You're gonna say, well, I drive my car, you're gonna look at your total expenses and say, well, I drive my car 80% business or something like that. And it's usually not gonna be perfect because you're trying to estimate and it's difficult because you use it for personal and you use it for business. You commute as well as use it for other things. Example. Example? Example. You are the sole proprietor of a flower shop. You drove your van 20,000 miles during the year. 16,000 miles were for delivering flowers to customers and 4,000 miles were for personal use, including commuting miles. So you can claim only 80%, which is the 16,000 divided by the total miles of 20, of the cost of operating your van as business expense. So when you're trying to do this as a tax preparer, you're often gonna have to work with clients to get these numbers and be like, well, what do you think the total, what are the total miles that you drove on the year? And how much of that, well, how many of those miles do you think are gonna be, how much of those miles are business miles? And you wanna be able to track this and of course document it as well as you can because these deductions are gonna be a big deduction oftentimes. So if you had an audit, you'd most likely be questioned possibly about car and auto because those are some of the big items. So you wanna get it as accurate as you can, but obviously we are using an estimate which is inherently gonna have some estimation in it. So more information. For more information about the rules for claiming car and truck expenses, you can see publication 463. I'll reimbursing your employees for expenses. You can generally deduct the amount you reimbursed your employees for car and truck expenses as well. The reimbursement you deduct and the manner in which you deduct, it depend on part in part on whether you reimbursed the expenses under the accountable plan or a non-accountable plan. So notice that if you have employees, then if they're driving their car and truck expenses, like and you reimbursed them for the car and truck expenses.