I am a new driver for Uber and am thinking of buying a new car. The car would be used 85 to 90% for uber and will cost approximately $32k with sales tax. Am I better off using the standard deduction for mileage or the actual expense method? The car is a plug-in hybrid that qualifies for a $4500 fed tax credit and $1500 state credit. Thank you
Hi Monte, congratulations on landing the Uber gig! When it comes to deciding whether you should go with the standard mileage deduction vs. actual vehicle expenses, you really should run both calculations and whichever provides you with the highest tax deduction, go with that one. I have provided links below to a couple articles that should help you do the necessary calculations:
When To Use Standard Rate vs. Actual Car Expenses:https://fitsmallbusiness.com/standard-mileage-rate-deduction/
Car Depreciation: How To Calculate Your Deduction:https://fitsmallbusiness.com/car-depreciation-deduction/
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