Do you use expenses or mileage reimbursement?

Question

New member here. I just posted in "new intros". I have a question. I started managing some properties my dad and I own. They are spit into several LLC's. The vehicles that will be used in the management and upkeep of the properties are owned personally by me. They are older vehicles with no payment and expenses are minimum. My properties are far away from my home (150 mile roundtrip). It seems to me mileage reimbursement vs expenses would be much better. Thoughts

I have a running list of questions for the accountant when we meet, but wanted your input.

JD Martin · Answer

From my numbers mileage has been better on older, paid-for vehicles. Expense is better on newer, leased or purchased vehicles. Maybe someone can clarify here @Brandon Hall @Natalie Kolodij @Linda Weygant , but I believe if you start off mileage you can't switch later on the same vehicle, whereas you can switch from expenses to mileage.

Michael Plaks · Answer

@James Miller

Rule of thumb:

If expenses are small and mileage is significant (seems to be your case) - mileage allowance will save you more.

Actual expenses can be higher if either mileage is small or expenses are high. High expenses include high repairs or depreciation.

Lance Lvovsky · Answer

@James Miller

Generally mileage is the way to go. If you want track both and then have your CPA figure out which is more beneficial.

Michael Plaks · Answer

Correct. Can switch from mileage to actual down the road, but not the other way around. Once you start actual expenses, must continue for the same vehicle forever.

James Miller · Answer

Thanks for the input. Seems like the consensus is mileage on older (paid for) vehicles traveling far distances.

James Miller · Answer

I think your tag picked up the wrongness James Miller. :)

Do you use expenses or mileage reimbursement?

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