2017 What's Best? IRS or Actual Expenses     Copyright 2017 by W. Murray Bradford, CPA, Ver. 1.1              
     
                 
                 
Results of After-Tax Cash Savings   Additional Savings          
Actual Expense Method        
IRS Mileage Method        
             
       
Step 1: Vehicle Information       Vehicle Type Table          
Purchase price (if leased, fair market value) *To enter data, enter number, then tab 2 new car 6,000 pounds or less curb weight        
Enter number for type of vehicle from the table on the right **Only enter data in shaded cells 3 used car 6,000 pounds or less curb weight        
Business use percentage         4 new truck or van with GVWR of 6,000 pounds or less      
Years you will use your vehicle in business     5 used truck or van with GVWR of 6,000 pounds or less      
Projected sales price of vehicle at end of business use     20 new or used Section 179 qualifying vehicle, e.g., SUV or pickup truck (GVWR > 6,000 pounds) or car (curb weight > 6,000 pounds)    
Your tax rate, including self-employment tax       Section 179 limits: Pickup $500,000; SUV & Crossover Vehicle $25,000    
Your tax rate, excluding self-employment tax        
       
       
Step 2: Purchase or Lease        
Did you purchase or lease the vehicle?     Purchased    
            Lease    
Purchase Info        
Is vehicle new? Want bonus depreciation? If yes, enter Yes    
If vehicle number is 20, what amount to Section 179 expense?    
         
Lease Info        
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      
       
       
Step 3: Mileage Information        
Miles driven per year (business and personal total)    
Miles per gallon        
Cost of gas (diesel, etc.) per gallon      
       
       
Step 4: Operating Expenses        
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.    
Total annual operating expenses (calculated amount)    
       
       
       
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. Results are for the life of the vehicle using 2017 tax law.          
         
   
   
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      
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 $3,160.00 $3,160.00 $3,560.00 $3,560.00    
MACRS Yr 2 32.00% 2 $5,100.00 $5,100.00 $5,700.00 $5,700.00      
MACRS Yr 3 19.20% 3 $3,050.00 $3,050.00 $3,450.00 $3,450.00      
MACRS Yr 4 11.52% 4 $1,875.00 $1,875.00 $2,075.00 $2,075.00      
MACRS Yr 5 11.52% 5 $1,875.00 $1,875.00 $2,075.00 $2,075.00      
MACRS Yr 6 5.76% 6 $1,875.00 $1,875.00 $2,075.00 $2,075.00      
Limit year 7 Year 6 luxury limits are the lesser of depreciation for the year or $1,875 (for cars) or $2,075 (for trucks) as per IRS Pub. 463. Year 7 and later represent depreciation not yet deducted which is available up to $1,875 a year (for cars) or $2,075 (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            
       
       
2017 Lease Inclusion Table--Rev. Proc. 2017-29    
Fair Market Value Tax Year During the Lease    
Over Not Over 1 2 3 4 5 6 7 8 9 10    
19,000 19,500 6 14 20 23 27 27 27 27 27 27    
19,500 20,000 7 16 23 27 31 31 31 31 31 31    
20,000 20,500 8 18 26 30 35 35 35 35 35 35    
20,500 21,000 9 20 28 35 39 39 39 39 39 39    
21,000 21,500 10 21 32 38 44 44 44 44 44 44    
21,500 22,000 11 23 35 42 47 47 47 47 47 47    
22,000 23,000 12 27 39 47 53 53 53 53 53 53    
23,000 24,000 14 31 45 54 62 62 62 62 62 62    
24,000 25,000 16 34 52 61 70 70 70 70 70 70    
25,000 26,000 18 38 58 68 78 78 78 78 78 78    
26,000 27,000 19 43 63 75 87 87 87 87 87 87    
27,000 28,000 21 47 69 82 95 95 95 95 95 95    
28,000 29,000 23 51 75 89 103 103 103 103 103 103    
29,000 30,000 25 55 80 97 112 112 112 112 112 112    
30,000 31,000 27 58 87 104 120 120 120 120 120 120    
31,000 32,000 29 62 93 111 128 128 128 128 128 128    
32,000 33,000 30 67 99 118 136 136 136 136 136 136    
33,000 34,000 32 71 104 126 144 144 144 144 144 144    
34,000 35,000 34 75 110 133 152 152 152 152 152 152    
35,000 36,000 36 79 116 140 160 160 160 160 160 160    
36,000 37,000 38 82 123 147 169 169 169 169 169 169    
37,000 38,000 40 86 129 154 177 177 177 177 177 177    
38,000 39,000 41 91 134 161 186 186 186 186 186 186    
39,000 40,000 43 95 140 168 194 194 194 194 194 194    
40,000 41,000 45 99 146 175 202 202 202 202 202 202    
41,000 42,000 47 103 152 182 210 210 210 210 210 210    
42,000 43,000 49 106 159 189 218 218 218 218 218 218    
43,000 44,000 50 111 164 197 226 226 226 226 226 226    
44,000 45,000 52 115 170 204 234 234 234 234 234 234    
45,000 46,000 54 119 176 211 243 243 243 243 243 243    
46,000 47,000 56 123 182 218 251 251 251 251 251 251    
47,000 48,000 58 127 187 225 260 260 260 260 260 260    
48,000 49,000 60 130 194 232 268 268 268 268 268 268    
49,000 50,000 61 135 200 239 276 276 276 276 276 276    
50,000 51,000 63 139 206 246 284 284 284 284 284 284    
51,000 52,000 65 143 211 254 292 292 292 292 292 292    
52,000 53,000 67 147 217 261 301 301 301 301 301 301    
53,000 54,000 69 151 223 268 309 309 309 309 309 309    
54,000 55,000 70 155 229 275 318 318 318 318 318 318    
55,000 56,000 72 159 235 282 326 326 326 326 326 326    
56,000 57,000 74 163 241 289 334 334 334 334 334 334    
57,000 58,000 76 167 247 296 342 342 342 342 342 342    
58,000 59,000 78 171 253 303 350 350 350 350 350 350    
59,000 60,000 80 174 260 310 359 359 359 359 359 359    
60,000 62,000 82 181 268 321 371 371 371 371 371 371    
62,000 64,000 86 189 280 335 387 387 387 387 387 387    
64,000 66,000 90 197 292 349 404 404 404 404 404 404    
66,000 68,000 93 205 304 364 420 420 420 420 420 420    
68,000 70,000 97 213 315 379 436 436 436 436 436 436    
70,000 72,000 101 221 327 393 453 453 453 453 453 453    
72,000 74,000 104 229 339 407 470 470 470 470 470 470    
74,000 76,000 108 237 351 421 486 486 486 486 486 486    
76,000 78,000 111 245 363 436 502 502 502 502 502 502    
78,000 80,000 115 253 375 450 518 518 518 518 518 518    
80,000 85,000 122 267 396 474 548 548 548 548 548 548    
85,000 90,000 131 287 425 511 588 588 588 588 588 588    
90,000 95,000 140 307 455 546 630 630 630 630 630 630    
95,000 100,000 149 327 485 581 671 671 671 671 671 671    
100,000 110,000 162 357 530 635 733 733 733 733 733 733    
110,000 120,000 181 397 589 706 815 815 815 815 815 815    
120,000 130,000 199 437 649 777 898 898 898 898 898 898    
130,000 140,000 217 477 708 849 980 980 980 980 980 980    
140,000 150,000 235 517 768 920 1,062 1,062 1,062 1,062 1,062 1,062    
150,000 160,000 254 557 827 991 1,145 1,145 1,145 1,145 1,145 1,145    
160,000 170,000 272 597 887 1,062 1,227 1,227 1,227 1,227 1,227 1,227    
170,000 180,000 290 637 946 1,134 1,309 1,309 1,309 1,309 1,309 1,309    
180,000 190,000 308 677 1,006 1,205 1,391 1,391 1,391 1,391 1,391 1,391    
190,000 200,000 326 718 1,064 1,277 1,473 1,473 1,473 1,473 1,473 1,473    
200,000 210,000 345 757 1,124 1,348 1,556 1,556 1,556 1,556 1,556 1,556    
210,000 220,000 363 797 1,184 1,419 1,638 1,638 1,638 1,638 1,638 1,638    
220,000 230,000 381 837 1,244 1,490 1,721 1,721 1,721 1,721 1,721 1,721    
230,000 240,000 399 878 1,302 1,562 1,803 1,803 1,803 1,803 1,803 1,803    
240,000 and over 418 917 1,362 1,633 1,885 1,885 1,885 1,885 1,885 1,885    
   
Current IRS Mileage Rates    
2017 IRS mileage rate 53.5 cents $ 0.535    
2017 Depreciation rate 25 cents per IRS mile $ 0.25