Margonme":3374bzzj said:talltimber":3374bzzj said:Margonme":3374bzzj said:The mileage is an operating expense. Regardless of whether the truck has been depreciated. I don't have my taxes in front of me but I think I used a 5 year depreciation life on it. After depreciation, you can continue to deduct actual expenses or mileage. It is explained well in the Schedule F instructions
You're truck is >50%, or whatever the cutoff is, used for farm use? No appreciable personal/commuter use? Reason I ask is that I have been told, on a truck bought year before last, by two different tax preparers, was that if it was used more than a limited amount I could only count mileage, but if it was claimed as a "farm truck" it could be depreciated out over five but no mileage (at least until then). Curious as to what's going on and if I'm shorting myself, and need to find a third tax preparer lol
He has mine at 49.22% farm use.
I deduct mileage at the rate of 54 cents per mile for tax year 2016 on my Ford F-350 "farm truck". My sole occupation is farming. My "farm truck" is solely dedicated to the performance of that occupation. I do not use it to commute to an off-farm job. The truck has already been totally depreciated. Only mileage expenses are deducted this tax year. I don't deduct repairs, oil changes, insurance, license, or property tax.
In regard to depreciation. My reading of the Schedule F instructions indicates that depreciation does not exclude deducting operating expenses. They are separate functions. Depreciation allows you to "write off" the capital cost of the original purchase of your farm truck. Operating expenses allows you to deduct what it costs to operate the truck excluding the capital cost. You should clarify that with your tax preparer. But it does not make sense if you cannot. In my case, I am not doing both in the same year since my farm truck is beyond the depreciation period.
Margonme,
I hesitate to write this post, but feel that I owe it to the misinformed not to follow your advice. You would be well advised to seek the advice of professional in preparing your return. (even tho we all know that you are of far too much intelligence to stoop so low.)
I not only own a small farm, but have been in the income tax business for 31 years. To deduct mileage in lieu of actual expenses requires that you start using mileage the first year the vehicle is placed into service. While using mileage you are "NOT" allowed to depreciate the vehicle, because the IRS has that figured into the std mileage rate. There are only special circumstances that you are allowed to switch methods.
The following is taken from Pub17, Your Federal Income Tax.
The standard mileage rate is used in place of actual expenses. Taxpayers who choose the standard mileage rate may not deduct actual expenses, such as depreciation, lease payments, maintenance and repairs, gasoline (including gasoline taxes), oil, insurance or vehicle registration fees.
If you elect to claim actual expenses , you cannot later switch to mileage after using up the Depreciation.
The tax laws go much deeper than this simple explanation, but I'll not go there. I am far too busy at this time of the year to argue with someone who interprets the law in there favor.
As I stated, I can only hope that others on this forum do not use your advice and get themselves into trouble with Big Brother. You will probably continue, and I don't really care. Do not answer me expecting a response. I have said my piece and I will not be drug into a debate. My clients will never get into the trouble you are creating. Have a good evening!