ATX 2014

Vehicles

You must provide certain information to the IRS if you claim any deduction for a vehicle (whether standard mileage, actual expenses, or depreciation) or if you claim a depreciation deduction for any other listed property.

You must keep written records to support business use. For example, if you use your car for business purposes, keep a log of all business miles driven. Do not submit this with your tax return, but keep it in your records.

Business use of a vehicles is reported on Form 4562, Part V, Section B.

If you provide vehicles to your employees who are not more than 5% owners or related persons, you may not have to complete Form 4562, Part V, Section B. To do this, you must meet one of the following requirements:

You must maintain a written policy prohibiting employees from using the vehicle for personal use (including commuting) or personal use other than commuting by employees who are not officers, directors, or more than 1% owners.
You must treat all use of the vehicles by your employees as personal use.
You provide more than five vehicles for use by employees and keep information about the use of the vehicles in your records.
If you have a demonstrator automobile provided to full-time salespersons, you must maintain a written policy that limits the total mileage outside the normal working hours. This policy must also prohibit the vehicle’s use by any other persons, for vacations, and for storing personal possessions.

Depreciation Limits on Business Vehicles

The total depreciation deduction (including the section 179 deduction) you can take for a passenger automobile (that is not a truck or a van) you use in your business and first placed in service in 2014 is $11,160 ($3,160 if you elect not to claim the special depreciation allowance).

The total depreciation deduction (including the section 179 deduction) you can take for trucks and vans you use in your business and first placed in service in 2014 is $11,360 ($3,360 if you elect not to claim the special depreciation allowance).

These limits are reduced if the business use of the vehicles is less than 100%.