Auto Depreciation Newbie here so bare with me please. I bought my wife a new Lexus GS350 earlier this year when she was not working. Then she decided she was bored and wanted to get a "part time" job which now has her working 30-40 hours a week and running all over southern Mississippi 3-5 days a week. In addition to figuring out what I can claim as "home office" I wanted to know what exactly I can deduct related to car expenses.
First of all, the employer pays (I believe) 35 cents per mile. I understand that if I wanted to deduct mileage, I could deduct the difference between the federal rate and what she is actually reimbursed for. That being said, I have been told that taking depreciation is a much better option. Three questions:
1) Is that so?
2) Can I take depreciation if she is already partly reimbursed for mileage?
3) How exactly do I do that and are there limitations related to vehicle cost, percentage of income, etc?
I read on the IRS website that the IRS essentially penalizes for "luxury" cars. While the Lexus is a luxury car and would not be my first choice as a work vehicle, I didn't really have an option since the car wasn't purchased FOR a work vehicle. |