2010 What's Best? IRS or Actual Expenses
Note. Corporations may not use the IRS mileage rate to calculate corporate deductions, but can use either the IRS mileage rate or actual expenses to reimburse the employee-owner. Therefore, this Analyzer applies to the owner of a corporation just as it does to the proprietor.					Copyright 2011 by W. Murray Bradford, CPA, Ver. 1.1
Results are for the life of the vehicle using 2010 tax law			2010 comparison
Results: This result is for a			2010
Actual expenses--after-tax cash benefit
IRS mileage method--after-tax cash benefit
Cash benefit: actual is best by (if negative, IRS is best by)
Start here--enter data and hit tab--see results change
Purchase price (if leased, fair market value)				**To enter data, enter number, then tab
Business use percentage
Years you will use your vehicle in business
Projected sales price of vehicle at end of business use
Your tax rate, including self-employment tax
Your tax rate, excluding self-employment tax
Operating Expenses
Miles driven per year (business and personal total)
Miles per gallon
Cost of gas (diesel, etc.) per gallon
Gallons of fuel purchased for the year (calculated amount)					""
Total cost of gasoline for a year (calculated amount)
Cost of car washes for a year
Cost of tires for a year					""
Cost of other repairs and maintenance for a year
Cost of insurance (make sure to double six month premiums)
Other costs, license fees, registration fees, etc.					Vehicle type table
Total annual operating expenses (calculated amount)					2 - new car 6,000 pounds or less curb weight
Purchased vehicles					3 - used car 6,000 pounds or less curb weight
Enter number for type of vehicle from the table on the right					4 - new truck or van with GVWR of 6,000 pounds or less
If vehicle number is 20, what amount to Section 179 expense?					5 - used truck or van with GVWR of 6,000 pounds or less
Is vehicle new? Want bonus depreciation? If yes, enter 50% for					20 - new or used Section 179 qualifying vehicle, e.g., SUV or pickup
vehicles placed in service before 9/9/2010, or 100% if after 9/8					truck (GVWR > 6,000 pounds) or car (curb weight > 6,000 pounds)
Leased vehicles					Section 179 limits: Pickup $500,000; SUV & Crossover Vehicle $25,000
Enter 1 if you lease the vehicle, otherwise, leave blank
Lease down payment (exclude prepayment of 1st, last month)
Monthly lease payment
Length of lease in years and months, enter full years here
Enter additional months here
IRS Mileage Rates				**Consider some "what if" calculations as IRS rates do change				Click Here for Rates
2010 IRS mileage rate 50 cents
2010 Depreciation rate 23 cents per IRS mile
Results: This result is for a			2010
Actual expenses--after-tax cash benefit
IRS mileage method--after-tax cash benefit
Actual is best by (if negative, IRS is best by)
The calculations in the shaded area below were used in producing the results above.
We make the calculations for you and show them to you for your information and reference.
STEP1. COMPARE ACTUAL EXPENSES WITH IRS MILEAGE RATES (FOR VEHICLES OWNED, NOT LEASED)
Actual Expense Method						IRS Mileage Rate
Depreciation						Business miles driven
Operating expenses						IRS rate per mile
Total deductions						Total deductions
Tax rate						Tax rate
Cash savings						Cash savings
STEP 2. COMPARE CASH SAVINGS WHEN CAR IS SOLD (FOR VEHICLES OWNED, NOT LEASED)
Actual Expense Method						IRS Mileage Rate
Business cost of car						Business cost of car
Less depreciation						Less depreciation
Adjusted basis						Adjusted basis
Less business sales proceeds						Less business sales proceeds
Business loss (gain)						Business loss (gain)
Tax rate						Tax rate
Cash savings						Cash savings
STEP 3. COMBINED CASH SAVINGS FROM OPERATIONS AND SALE (FOR VEHICLES OWNED, NOT LEASED)
Actual Expense Method						IRS Mileage Rate
From deductions						From deductions
From loss (gain) on sale						From loss (gain) on sale
Total cash savings						Total cash savings
Extra cash (after taxes) with actual method
COMPARE ACTUAL EXPENSES WITH IRS MILEAGE RATES FOR LEASED VEHICLES
Actual Expense Method						IRS Mileage Rate
Deductible cost of lease						Miles driven
Operating expenses						IRS rate per mile
Total deductions						Total deductions
Tax rate						Tax rate
Cash savings						Cash savings
Extra cash (after taxes) with actual method
LUXURY LIMITS TABLE FOR VEHICLE TYPES 2, 3, 4, AND 5
Gross vehicle cost
Bonus depreciation percentage
100% bonus depreciation, if applicable (new vehicles only)
Limit on bonus depreciation
Greater of computed bonus or limit
Business percentage
Bonus depreciation					Luxury Limits				Applicable	Business	Useable	Depr	Bonus	Ownership
Adjusted basis for depreciation				Lookup	New car	Used Car	New truck	Used Truck	Luxury Limit	Percentage	Amount	adjusted	Depreciation	Period
			Computed	0	2	3	4	5	From Left			Yr of sale		Depr
MACRS Yr 1	Assumes that the car is sold on the first day of the year following the last year of ownership. Thus, one-half year of depreciation is taken in that year.	20.00%		1	$3,060.00	$3,060.00	$3,160.00	$3,160.00
MACRS Yr 2		32.00%		2	$4,900.00	$4,900.00	$5,100.00	$5,100.00
MACRS Yr 3		19.20%		3	$2,950.00	$2,950.00	$3,050.00	$3,050.00
MACRS Yr 4		11.52%		4	$1,775.00	$1,775.00	$1,875.00	$1,875.00
MACRS Yr 5		11.52%		5	$1,775.00	$1,775.00	$1,875.00	$1,875.00
MACRS Yr 6		5.76%		6
Limit year 7		Year 6 luxury limits are the lesser of depreciation for the year or $1,775 (for cars) or $1,875 (for trucks) as per IRS Pub. 463. Year 7 and later represent depreciation not yet deducted which is available up to $1,775 a year (for cars) or $1,875 (for trucks).		7
Limit year 8				8
Limit year 9				9
Limit year 10				10
Limit year 11				11
Limit year 12				12
Limit year 13				13
Limit year 14				14
Limit year 15				15
Limit year 16				16
Limit year 17				17
Limit year 18				18
Limit year 19				19
Limit year 20				20
												Table depreciation
SECTION 179 TABLE FOR TYPE 20 VEHICLES
Business cost (purchase price times business use percentage)
Section 179 expensing election, not to exceed business cost				Note: expensing of an SUV or crossover vehicle is limited to $25,000--if you had such a vehicle, make sure to limit expensing amount to $25,000.
Adjusted basis before bonus depreciation
Bonus depreciation percentage
Bonus depreciation							Depr	Ownership
Depreciable basis					Sec 179	Bonus	Adjusted	Period
			Computed		Depreciation	Depreciation	Yr of sale	Depreciation
MACRS Yr 1		20.00%		1
MACRS Yr 2		32.00%		2
MACRS Yr 3		19.20%		3
MACRS Yr 4		11.52%		4
MACRS Yr 5		11.52%		5
MACRS Yr 6		5.76%		6
						Table depreciation
LEASE TABLE
	Prorated Down Payment	Monthly Payments	Lease Inclusion Amount	Lease Payments After Inclusion	Business Percentage	Tax Deductible Lease Payments
1
2
3
4
5
6
7
8
9
10
Total
				Deductible cost of lease
2010 Lease Inclusion Table--Rev. Proc. 2010-18
Fair Market Value		Tax Year During the Lease
Over	Not Over	1	2	3	4	5	6	7	8	9	10
16,700	17,000	3	7	10	11	14	14	14	14	14	14
17,000	17,500	4	8	13	15	16	16	16	16	16	16
17,000	18,000	5	10	16	19	21	21	21	21	21	21
18,000	18,500	6	13	18	23	26	26	26	26	26	26
18,500	19,000	7	15	22	26	31	31	31	31	31	31
19,000	19,500	8	17	25	30	35	35	35	35	35	35
19,500	20,000	9	19	29	34	39	39	39	39	39	39
20,000	20,500	10	21	32	38	44	44	44	44	44	44
20,500	21,000	11	23	35	42	48	48	48	48	48	48
21,000	21,500	12	26	38	45	53	53	53	53	53	53
21,500	22,000	13	28	41	50	57	57	57	57	57	57
22,000	23,000	14	31	46	56	63	63	63	63	63	63
23,000	24,000	16	36	52	63	73	73	73	73	73	73
24,000	25,000	18	40	59	71	81	81	81	81	81	81
25,000	26,000	20	44	66	78	90	90	90	90	90	90
26,000	27,000	22	49	71	86	100	100	100	100	100	100
27,000	28,000	24	53	78	94	108	108	108	108	108	108
28,000	29,000	26	57	85	101	118	118	118	118	118	118
29,000	30,000	28	61	92	109	126	126	126	126	126	126
30,000	31,000	30	66	97	117	135	135	135	135	135	135
31,000	32,000	32	70	104	125	144	144	144	144	144	144
32,000	33,000	34	74	111	132	153	153	153	153	153	153
33,000	34,000	36	79	117	140	161	161	161	161	161	161
34,000	35,000	38	83	123	148	171	171	171	171	171	171
35,000	36,000	40	87	130	156	179	179	179	179	179	179
36,000	37,000	42	92	136	163	188	188	188	188	188	188
37,000	38,000	44	96	143	170	198	198	198	198	198	198
38,000	39,000	46	100	149	179	206	206	206	206	206	206
39,000	40,000	48	105	155	186	215	215	215	215	215	215
40,000	41,000	50	109	162	194	224	224	224	224	224	224
41,000	42,000	52	113	169	201	233	233	233	233	233	233
42,000	43,000	54	118	174	210	241	241	241	241	241	241
43,000	44,000	56	122	181	217	251	251	251	251	251	251
44,000	45,000	58	126	188	225	259	259	259	259	259	259
45,000	46,000	60	131	194	232	269	269	269	269	269	269
46,000	47,000	61	135	201	240	277	277	277	277	277	277
47,000	48,000	63	140	207	248	286	286	286	286	286	286
48,000	49,000	65	144	213	256	295	295	295	295	295	295
49,000	50,000	67	148	220	263	304	304	304	304	304	304
50,000	51,000	69	153	226	271	313	313	313	313	313	313
51,000	52,000	71	157	232	279	322	322	322	322	322	322
52,000	53,000	73	161	239	287	331	331	331	331	331	331
53,000	54,000	75	166	245	294	340	340	340	340	340	340
54,000	55,000	77	170	252	302	348	348	348	348	348	348
55,000	56,000	79	174	258	310	358	358	358	358	358	358
56,000	57,000	81	178	265	318	366	366	366	366	366	366
57,000	58,000	83	183	271	325	375	375	375	375	375	375
58,000	59,000	85	187	278	333	384	384	384	384	384	384
59,000	60,000	87	191	284	341	393	393	393	393	393	393
60,000	62,000	90	198	294	352	406	406	406	406	406	406
62,000	64,000	94	207	306	368	424	424	424	424	424	424
64,000	66,000	98	215	320	382	443	443	443	443	443	443
66,000	68,000	102	224	332	398	460	460	460	460	460	460
68,000	70,000	106	232	346	413	478	478	478	478	478	478
70,000	72,000	110	241	358	429	496	496	496	496	496	496
72,000	74,000	114	250	371	444	513	513	513	513	513	513
74,000	76,000	118	258	384	460	531	531	531	531	531	531
76,000	78,000	122	267	396	476	549	549	549	549	549	549
78,000	80,000	126	276	409	491	566	566	566	566	566	566
80,000	85,000	132	291	432	518	598	598	598	598	598	598
85,000	90,000	142	313	464	556	643	643	643	643	643	643
90,000	95,000	152	334	497	594	687	687	687	687	687	687
95,000	100,000	162	356	528	634	731	731	731	731	731	731
100,000	110,000	177	388	577	691	798	798	798	798	798	798
110,000	120,000	196	432	641	768	887	887	887	887	887	887
120,000	130,000	216	475	705	846	976	976	976	976	976	976
130,000	140,000	236	518	770	922	1,065	1,065	1,065	1,065	1,065	1,065
140,000	150,000	256	561	834	1,000	1,154	1,154	1,154	1,154	1,154	1,154
150,000	160,000	275	605	898	1,077	1,243	1,243	1,243	1,243	1,243	1,243
160,000	170,000	295	648	963	1,153	1,333	1,333	1,333	1,333	1,333	1,333
170,000	180,000	315	691	1,027	1,231	1,421	1,421	1,421	1,421	1,421	1,421
180,000	190,000	334	735	1,091	1,308	1,510	1,510	1,510	1,510	1,510	1,510
190,000	200,000	354	778	1,155	1,386	1,599	1,599	1,599	1,599	1,599	1,599
200,000	210,000	374	821	1,220	1,462	1,688	1,688	1,688	1,688	1,688	1,688
210,000	220,000	393	865	1,284	1,539	1,777	1,777	1,777	1,777	1,777	1,777
220,000	230,000	413	908	1,348	1,617	1,866	1,866	1,866	1,866	1,866	1,866
230,000	240,000	433	951	1,413	1,693	1,956	1,956	1,956	1,956	1,956	1,956
240,000	and up	453	995	1,476	1,771	2,044	2,044	2,044	2,044	2,044	2,044