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After-Tax Savings: Actual
Expenses vs. IRS Mileage Rates (2022)
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Results of
After-Tax Cash Savings
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Additional Savings
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Additional Savings
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Actual Expense Method
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IRS Mileage Method
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Step 1: Vehicle
Information
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Purchase price (if leased, fair market
value)
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Enter data in shaded cells only
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Enter number for type of vehicle from the
table on the right
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Tab to next input cell
|
Vehicle Type
Table
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Business use percentage
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2
|
new or used
car 6,000 pounds or less curb weight
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Years you will use your vehicle in business
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3
|
new or used
truck or van 6,000 pounds or less curb weight
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Projected sales price of vehicle at end of
business use
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4
|
new or used
Section 179 qualifying vehicle, e.g., SUV, Crossover, or Van, GVWR > 6000
pounds, $27,000
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|
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Your tax rate, including self-employment
tax
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5
|
new or used
Section 179 qualifying vehicle, e.g., Pickup Truck, Cargo or Passenger Van,
GVWR > 6000 pounds, $1,080,000
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Your tax rate, excluding self-employment
tax
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Note for 2022: The TCJA increased
bonus depreciation to 100 percent for vehicles acquired and placed into
service after September 27, 2017. Bonus depreciation may also be applied to
used vehicles acquired and placed into service after September 27, 2017.
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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 2022 tax law
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Step 2: Purchase or Lease
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Did you purchase or lease the vehicle?
(click drop down menu)
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Purchase Info
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Want bonus depreciation? (click drop down
menu)
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|
If vehicle number is 4 or 5, what amount to
Section 179 expense?
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Lease Info
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Lease down payment (exclude prepayment of
1st, last month)
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Monthly lease payment
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Length of lease in years and months, enter
full years here
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Enter additional months here
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Step 3: Mileage
Information
|
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|
Historical
IRS Mileage Rates:
|
|
Historical
Depreciation Per Mile
|
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|
Pick your mileage rate for comparison
|
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Time Period
|
Rate Per Mile
|
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Time Period
|
Rate Per Mile
|
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|
|
Pick your depreciation rate per mile for
comparison
|
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|
07/01/2022 to
12/31/2022
|
$0.625
|
|
07/01/2022 to
12/31/2022
|
$0.26
|
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|
|
Consider using the historical rates on the
right
|
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|
01/01/2022 to
06/30/2022
|
$0.585
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01/01/2022 to
06/30/2022
|
$0.26
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|
Miles driven per year (business and
personal total)
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2021
|
$0.560
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2021
|
$0.26
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Miles per gallon
|
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2020
|
$0.575
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2020
|
$0.27
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|
Cost of gas (diesel, etc.) per gallon
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2019
|
$0.580
|
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2019
|
$0.26
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|
Total cost of gasoline for a year
(calculated amount)
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|
2018
|
$0.545
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2018
|
$0.25
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Step 4: Operating
Expenses
|
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|
Total cost of gasoline for a year (from
Step 3)
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|
Cost of car washes for a year
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|
Cost of tires (average cost per year)
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|
Cost of other repairs and maintenance
(average cost per year)
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|
Cost of insurance (make sure to double six
month premiums)
|
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|
|
Other costs, license fees, registration
fees, etc.
|
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|
|
Total annual operating expenses
(calculated amount)
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|
|
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.
|
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|
|
|
STEP 1. COMPARE ACTUAL EXPENSES WITH IRS MILEAGE
RATES (FOR VEHICLES OWNED, NOT LEASED)
|
|
|
|
Actual Expense Method
|
|
IRS Mileage Rate
|
|
|
|
Depreciation
|
|
|
Business miles driven
|
|
Miles driven X Years of use X Business %
|
|
|
|
Operating expenses
|
|
|
|
|
IRS rate per mile
|
|
|
|
|
Total deductions
|
|
|
Total deductions
|
|
|
|
|
Tax rate
|
|
|
|
|
Tax rate
|
|
|
|
|
Cash savings
|
|
|
Cash savings
|
|
|
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|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE FOR VEHCILE 2 OR 3
|
|
|
|
|
|
Gross vehicle cost
|
|
|
|
|
|
|
Business percentage
|
|
|
|
|
|
|
Business basis
|
|
|
|
|
|
|
Bonus depreciation
|
|
|
|
|
|
|
|
|
Luxury limit
|
|
|
|
|
|
|
Luxury limit plus bonus depreciation
|
|
|
|
|
|
|
Business percentage of luxury limit with bonus
depreciation
|
|
|
|
Luxury Limits after Bonus Depreciation per Rev. Proc. 2019-13
Safe Harbor
|
Business percent of no bonus luxury limits
|
Business percent of bonus luxury limits
|
Depreciation with no
bonus depreciation
|
Depreciatin with bonus
depreciation
|
Selection
|
|
|
|
|
Basis after luxury limit with bonus depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No Bonus
|
|
|
|
|
|
|
MACRS Computed
|
MACRS Computed
|
|
Luxury Limits
|
|
|
|
|
|
|
|
from Business Basis
|
Basis after Bonus
|
Lookup
|
2 or 3
|
Yrs Before Sale
|
|
|
|
|
MACRS Yr 1
|
20.00%
|
|
N/A
|
1
|
$11,200
|
$19,200
|
|
|
|
|
|
|
|
|
|
|
|
MACRS Yr 2
|
32.00%
|
|
|
2
|
$18,000
|
$18,000
|
|
|
|
|
|
|
|
|
|
|
|
MACRS Yr 3
|
19.20%
|
|
|
3
|
$10,800
|
$10,800
|
|
|
|
|
|
|
|
|
|
|
|
MACRS Yr 4
|
11.52%
|
|
|
4
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
MACRS Yr 5
|
11.52%
|
|
|
5
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
Sum Depr
|
Sum Depr
|
Remain
|
Remain
|
|
|
MACRS Yr 6
|
5.76%
|
|
|
6
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
No Bonus
|
Bonus
|
No Bonus
|
Bonus
|
|
|
Limit year 7
|
|
|
|
7
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 8
|
|
|
|
8
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 9
|
|
|
|
9
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 10
|
|
|
|
10
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 11
|
|
|
|
11
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 12
|
|
|
|
12
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 13
|
|
|
|
13
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 14
|
|
|
|
14
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 15
|
|
|
|
15
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 16
|
|
|
|
16
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 17
|
|
|
|
17
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 18
|
|
|
|
18
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 19
|
|
|
|
19
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limit year 20
|
|
|
|
20
|
$6,460
|
$6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: This table ignores the half-year
convention in the year of sale
|
|
|
|
|
|
|
|
|
|
|
|
|
because creates the creates the same gain or
loss on sale.
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE FOR TYPE 4 OR 5 VEHICLE
|
|
|
|
|
|
|
|
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 $27,000. If you had
such a vehicle, make sure to limit expensing amount to $27,000.
|
|
|
|
Adjusted basis before bonus depreciation
|
|
|
|
|
Bonus depreciation percentage
|
|
|
|
|
Bonus depreciation
|
|
|
|
Bonus Depreciation
|
Depr Adjusted Yr of Sale
|
Ownership Period Depreciation
|
|
|
|
Depreciable basis
|
|
|
Sec 179 Depreciation
|
|
|
|
|
Computed
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 Lease Inclusion Table--Rev. Proc. 2022-17
|
|
|
|
Fair Market Value
|
Tax Year
During the Lease
|
|
|
|
Over
|
Not Over
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
|
10
|
|
|
|
56,000
|
57,000
|
1
|
1
|
1
|
2
|
2
|
2
|
2
|
2
|
2
|
2
|
|
|
|
57,000
|
58,000
|
2
|
4
|
5
|
7
|
7
|
7
|
7
|
7
|
7
|
7
|
|
|
|
58,000
|
59,000
|
3
|
7
|
9
|
11
|
13
|
13
|
13
|
13
|
13
|
13
|
|
|
|
59,000
|
60,000
|
4
|
9
|
14
|
16
|
19
|
19
|
19
|
19
|
19
|
19
|
|
|
|
60,000
|
62,000
|
6
|
13
|
20
|
23
|
28
|
28
|
28
|
28
|
28
|
28
|
|
|
|
62,000
|
64,000
|
9
|
19
|
27
|
34
|
38
|
38
|
38
|
38
|
38
|
38
|
|
|
|
64,000
|
66,000
|
11
|
24
|
36
|
43
|
50
|
50
|
50
|
50
|
50
|
50
|
|
|
|
66,000
|
68,000
|
14
|
30
|
43
|
53
|
61
|
61
|
61
|
61
|
61
|
61
|
|
|
|
68,000
|
70,000
|
16
|
35
|
52
|
63
|
72
|
72
|
72
|
72
|
72
|
72
|
|
|
|
70,000
|
72,000
|
19
|
40
|
61
|
72
|
83
|
83
|
83
|
83
|
83
|
83
|
|
|
|
72,000
|
74,000
|
21
|
46
|
68
|
82
|
95
|
95
|
95
|
95
|
95
|
95
|
|
|
|
74,000
|
76,000
|
24
|
51
|
77
|
91
|
106
|
106
|
106
|
106
|
106
|
106
|
|
|
|
76,000
|
78,000
|
26
|
57
|
85
|
101
|
117
|
117
|
117
|
117
|
117
|
117
|
|
|
|
78,000
|
80,000
|
29
|
62
|
93
|
111
|
128
|
128
|
128
|
128
|
128
|
128
|
|
|
|
80,000
|
85,000
|
33
|
72
|
107
|
128
|
148
|
148
|
148
|
148
|
148
|
148
|
|
|
|
85,000
|
90,000
|
39
|
86
|
127
|
152
|
176
|
176
|
176
|
176
|
176
|
176
|
|
|
|
90,000
|
95,000
|
45
|
100
|
147
|
177
|
204
|
204
|
204
|
204
|
204
|
204
|
|
|
|
95,000
|
100,000
|
52
|
113
|
167
|
201
|
233
|
233
|
233
|
233
|
233
|
233
|
|
|
|
100,000
|
110,000
|
61
|
133
|
198
|
238
|
274
|
274
|
274
|
274
|
274
|
274
|
|
|
|
110,000
|
120,000
|
73
|
161
|
239
|
286
|
330
|
330
|
330
|
330
|
330
|
330
|
|
|
|
120,000
|
130,000
|
86
|
188
|
279
|
335
|
387
|
387
|
387
|
387
|
387
|
387
|
|
|
|
130,000
|
140,000
|
98
|
216
|
319
|
384
|
443
|
443
|
443
|
443
|
443
|
443
|
|
|
|
140,000
|
150,000
|
111
|
243
|
360
|
432
|
499
|
499
|
499
|
499
|
499
|
499
|
|
|
|
150,000
|
160,000
|
123
|
270
|
401
|
481
|
555
|
555
|
555
|
555
|
555
|
555
|
|
|
|
160,000
|
170,000
|
135
|
298
|
441
|
529
|
612
|
612
|
612
|
612
|
612
|
612
|
|
|
|
170,000
|
180,000
|
148
|
325
|
482
|
578
|
667
|
667
|
667
|
667
|
667
|
667
|
|
|
|
180,000
|
190,000
|
160
|
352
|
523
|
626
|
724
|
724
|
724
|
724
|
724
|
724
|
|
|
|
190,000
|
200,000
|
173
|
379
|
563
|
676
|
779
|
779
|
779
|
779
|
779
|
779
|
|
|
|
200,000
|
210,000
|
185
|
407
|
603
|
724
|
836
|
836
|
836
|
836
|
836
|
836
|
|
|
|
210,000
|
220,000
|
198
|
434
|
644
|
773
|
892
|
892
|
892
|
892
|
892
|
892
|
|
|
|
220,000
|
230,000
|
210
|
461
|
685
|
821
|
949
|
949
|
949
|
949
|
949
|
949
|
|
|
|
230,000
|
240,000
|
222
|
489
|
725
|
870
|
1005
|
1005
|
1005
|
1005
|
1005
|
1005
|
|
|
|
240,000
|
and over
|
235
|
516
|
766
|
918
|
1061
|
1061
|
1061
|
1061
|
1061
|
1061
|
|
|
|
|
|
|
|
|
|
|
|
Copyright
2022 by W. Murray Bradford, CPA
|
|