Can I claim vehicle depreciation if I didn't last year?

Question

I usually claim standard mileage, but I bought a new car 11/05 started using it for business 1/06 can I claim actual using vehicle depreciation on my taxes or just standard? My other car I have I never used for business before, but used it breifly in 06 for about 20% for work can I claim this also? What do I need to put for date of service? When I bought the car or when I started using it?
Thanks!!

Answer 1

Hello, Marge! If you claim/claimed the standard deduction in the first year of business use, you can switch to actual expenses at any time. If you use actual expenses in the first year of business use, switching back to the standard mileage rate is disallowed.

Since you just started using the new car in 2006, choose carefully which method you will use since this will be the first year. The date the form wants is "Date placed in service," so you would enter the date you started using it for business, not the purchase date.

For both the new car and the old one, you will be able to state the percentage of business use when you claim the expenses on Form 2106.

If you would like more details, check the following IRS links. Good luck! :-)

Answer 2

If you claim actual expenses and take a deduction for depreciation, you must use the straight-line method if you wish to switch to the mileage rate in future years. If you take any accelerated depreciation, you ware forever locked in to the actual expense method as long as that vehicle is used in business by you.