Operating costs for vehicles used in a taxpayer's business are deductible. Thus, when taxpayers use their automobiles in their businesses or employment, they can deduct that portion of the cost of operating their vehicle. Vehicle property taxes can be deducted if they are itemized on Schedule A. This course reviews personal and business use apportionment, the actual cost method, the standard mileage method and expensing. Moreover, this presentation informs practitioners about the benefits and costs of leasing versus owning and working condition fringe benefits.
Learning Objectives
- Recognize tax vehicle depreciation (168) and expensing (179) methods including their requirements and limitations under MACRS and recognize basis, business use and deduction computations.
- Specify the predominant business use rule recognizing the result of less than 50% qualified business use, cite the pros and cons of auto leasing, and determine how to estimate monthly lease payments indicating what factors affect payments so clients may recognize leasing costs and know common leasing terms.
- Identify items included under the standard mileage method listing items that may be separately deducted, determine the taxable fringe benefit value of an employer-provided automobile using the general and special valuation methods and specify several qualified nonpersonal use vehicles stating what reporting standards apply.
Major Topics
- Apportionment of personal & business use
- Deduction limitations using the actual cost method
- Expensing
- 179
- Predominate business use rule
- Auto leasing
- Standard mileage method
- Auto trade-in vs. sale
- Employer-provided automobile
- Nonpersonal use vehicle
- Reporting of an employer-provided automobile
