Yes! You Can Switch From IRS Mileage Rate to Actual-Expense Method

February 2nd, 2017 at 3:09 PM

02 Feb Yes! You Can Switch From IRS Mileage Rate to Actual-Expense Method

When you choose the mileage rate, you elect out of the actual method and also elect out of  MACRS depreciation. This does not mean you are locked out forever, though; the IRS allows 2 ways to escape from your original mileage-rate decision. One way is the amend your tax return BEFORE the original due date, including extensions; if you are unable to amend, then you simply switch to the actual-expense method using the straight-line depreciation over the vehicle’s remaining life.

When you amend your return, the bonus depreciation and Section 179 expensing become available. Escape two, one must use the straight line depreciation method.

The details to either one of these escapes are more more detailed than described above.

Either way, the good news is the one can switch from the IRS Mileage rate.