After-Tax Savings: Actual Expenses vs. IRS Mileage Rates (2022)      
         
       
    Results of After-Tax Cash Savings Additional Savings   Additional Savings  
      Actual Expense Method          
      IRS Mileage Method      
                 
         
           
  Step 1: Vehicle Information            
  Purchase price (if leased, fair market value) Enter data in shaded cells only        
  Enter number for type of vehicle from the table on the right Tab to next input cell Vehicle Type Table    
  Business use percentage     2 new or used car 6,000 pounds or less curb weight    
  Years you will use your vehicle in business     3 new or used truck or van 6,000 pounds or less curb weight    
  Projected sales price of vehicle at end of business use     4 new or used Section 179 qualifying vehicle, e.g., SUV, Crossover, or Van, GVWR > 6000 pounds, $27,000    
  Your tax rate, including self-employment tax     5 new or used Section 179 qualifying vehicle, e.g., Pickup Truck, Cargo or Passenger Van, GVWR > 6000 pounds, $1,080,000    
  Your tax rate, excluding self-employment tax     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.    
               
  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            
             
               
                 
  Step 2: Purchase or Lease                  
  Did you purchase or lease the vehicle? (click drop down menu)            
                     
  Purchase Info                
  Want bonus depreciation? (click drop down menu)            
  If vehicle number is 4 or 5, 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         Historical IRS Mileage Rates:   Historical Depreciation Per Mile          
  Pick your mileage rate for comparison       Time Period Rate Per Mile   Time Period Rate Per Mile          
  Pick your depreciation rate per mile for comparison     07/01/2022 to 12/31/2022 $0.625   07/01/2022 to 12/31/2022 $0.26          
  Consider using the historical rates on the right     01/01/2022 to 06/30/2022 $0.585   01/01/2022 to 06/30/2022 $0.26          
  Miles driven per year (business and personal total)     2021 $0.560   2021 $0.26          
  Miles per gallon   2020 $0.575   2020 $0.27          
  Cost of gas (diesel, etc.) per gallon     2019 $0.580   2019 $0.26            
  Total cost of gasoline for a year (calculated amount)     2018 $0.545   2018 $0.25        
                 
               
  Step 4: Operating Expenses          
  Total cost of gasoline for a year (from Step 3)      
  Cost of car washes for a year      
  Cost of tires (average cost per year)      
  Cost of other repairs and maintenance (average cost per year)      
  Cost of insurance (make sure to double six month premiums)      
  Other costs, license fees, registration fees, etc.      
  Total annual operating expenses (calculated amount)      
           
           
       
   
  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.  
     
  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    
             
  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