Depreciation on a vehicle: Can I claim it with standard mileage deduction for self-employment taxes?

You've actually got the right approach here. When you use the standard mileage rate for business use of your vehicle, that rate already factors in depreciation, maintenance, gas, insurance, and other vehicle expenses. For 2024, that rate is 67 cents per mile for business miles. You're correct that choosing the standard mileage rate in the first year gives you flexibility - you can switch to actual expenses in later years if you want. But if you start with actual expenses (which would include depreciation separately), you're locked into that method for the life of the vehicle. For your question about additional depreciation - no, you cannot take both the standard mileage rate AND claim separate depreciation on the same vehicle. It would be double-dipping since depreciation is already built into the standard mileage rate. However, you are absolutely right about the sales tax and registration fees! Even when using standard mileage, you CAN deduct these expenses in the first year proportionate to your business use. So if your business use is 60%, you can deduct 60% of those costs. You'd report these on Schedule C as "Taxes and Licenses" - separate from your vehicle expenses.

After struggling with similar vehicle depreciation questions last year, I found this amazing tool called taxr.ai (https://taxr.ai) that really helped me understand my options. I uploaded my vehicle purchase docs and business mileage logs, and it analyzed everything and showed me which method would save more - standard mileage vs. actual expenses with depreciation. The tool confirmed that I was better off with standard mileage in my case (I drive a lot for business), but it also flagged that I could deduct my registration fees and sales tax proportional to business use. It even calculated exactly how much I could claim and showed me where to put it on my Schedule C. Saved me at least $700 in taxes I would have missed!

I just wanted to follow up about my experience with taxr.ai after being skeptical initially. I decided to try it because my vehicle situation was similar to the original poster's. The analysis was really impressive - it showed me that in my case, I was actually leaving money on the table by using standard mileage. Because I have a heavier vehicle with high maintenance costs but relatively low annual mileage, the actual expense method with depreciation would save me about $2,100 over the standard mileage deduction. The tool even flagged that I qualified for bonus depreciation that my previous accountant had missed. Seriously worth checking out if you're on the fence about which method to use for vehicle deductions.

If you're also having trouble figuring out if you've claimed all your vehicle deductions correctly for past years, you might want to check out Claimyr (https://claimyr.com). I had been trying to reach the IRS for weeks about some confusion with my vehicle depreciation from a prior year, but kept getting disconnected or waiting forever. Claimyr got me connected to an actual IRS agent in about 15 minutes when I had been trying unsuccessfully for days. The agent was able to review my previous returns and confirm I could file an amended return to claim the sales tax and registration fees I had missed (just like you mentioned). There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent also gave me specific line references for where to put these expenses on my Schedule C, which was super helpful. Saved me from having to pay an accountant just to ask this one question.

I need to eat my words about Claimyr. After posting my skeptical comment, I was so frustrated trying to reach the IRS about my own vehicle depreciation question that I decided to try it. I seriously didn't believe it would work, but I was desperate. It connected me to an IRS agent in about 20 minutes when I had been trying for THREE WEEKS on my own without success. The agent helped confirm that I could still amend my return from last year to claim the vehicle sales tax I had missed even though I used the standard mileage rate. Saved me about $840 in taxes. The time saved alone was worth it, not to mention actually getting an answer from an official source instead of random internet advice.

One thing nobody has mentioned yet - if your SUV has a GVWR over 6,000 lbs, it might qualify as a "heavy SUV" for tax purposes, which changes the depreciation rules completely. Might be worth checking the vehicle specs because the tax advantages can be significant if you're using it primarily for business.

Has anyone switched from standard mileage to actual expenses after the first year? I'm wondering if it's worth keeping track of everything just in case actual expenses end up being higher in future years.

Just to add some clarity on the depreciation calculation if you do switch from mileage to actual expenses - it's actually not too complicated once you understand the concept. When you use standard mileage, the IRS considers that you've already "taken" depreciation at a rate of 27 cents per mile for 2024 (this is built into the 67 cents total rate). So if you drove 10,000 business miles in your first year using standard mileage, you've already "used up" $2,700 of depreciation ($0.27 x 10,000 miles). If you switch to actual expenses in year 2, you'd subtract that $2,700 from your vehicle's basis before calculating remaining depreciation. For your $26,500 Forester with 60% business use, your depreciable basis would be $15,900 (60% of $26,500). If you used standard mileage in 2024 and drove, say, 8,000 business miles, you'd subtract $2,160 in "deemed depreciation" from that $15,900 basis. Then you'd depreciate the remaining amount over the rest of the 5-year recovery period using straight-line method. The math gets a bit involved, but it's definitely doable with a good tax software or spreadsheet once you understand the concept.