The Money Mustache Community
Learning, Sharing, and Teaching => Entrepreneurship => Topic started by: katsiki on November 29, 2018, 11:56:09 AM
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Can someone help me understand when it makes sense to expense a vehicle (purchase or lease)? My question is in the context of a side job.
Thanks for your help.
P.S. I mean purchasing/leasing a vehicle for the side job.
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It's going to depend on how much you use that vehicle for business vs personal use.
Oftentimes, it's better to take the standard mileage rate on a vehicle you already own.
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Thanks @CareCPA !
I will have to pull my records from past years where I did similar work. I know I deducted mileage back then.
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I expense my mileage for my side job. I found and use a free app, TripLog Mileage, and it's been great. There's also a pay version which allows web access through their site, https://triplogmileage.com/.
I'm not affiliated with the company, I'm just passing along a suggestion of what I use which you can research to determine if you are interested...
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It makes sense to lease a vehicle for work if it will be used mostly for that work, you can bill extra for it, the amount of work justifies it, and you don't want to tie up too much of your capital. It's like renting office space - it makes sense if it generates extra income. Plus, there are neat tax write-offs for leases as opposed to financed or owned vehicles that help the decision making process. But, spending money for the sake of tax write-offs is faulty logic - it's still money that you won't have any more, so if you can avoid the expense, do so.
But, if it's only a side gig, just use your own car if it serves the purpose, and claim the mileage back as others have suggested. It will be cheaper.
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It's going to depend on how much you use that vehicle for business vs personal use.
Oftentimes, it's better to take the standard mileage rate on a vehicle you already own.
+1