Standard Mileage Rate For Electric Vehicles

Technical topics regarding tax preparation.
#1
makbo  
Posts:
6840
Joined:
23-Apr-2014 3:44pm
Location:
In The Counting House
My understanding is that the vehicle standard mileage rate for business use, which should be announced by the IRS in the next few months for 2019, is uniform across both electric and gasoline powered vehicles.

Then, I saw this jarring claim by a reporter in a regional newspaper: that electric buses (which can cost $200K more than a diesel bus), have fuel costs that are zilch?

OMG, I almost asked in the Spelling & Grammar thread, whether someone re-defined the meaning of "zilch" while I was asleep! :D

Do people think it is appropriate that there is a single rate for both types of vehicles? (By "appropriate", I mean, would neutral taxation of both types of vehicles continue to support the status quo?) Am I correct that there are subsidized charging stations in some public places, where one can re-fuel electric vehicles for free? Does anyone already factor in home-based charging costs for business use of personal vehicles for any of their tax clients?
 

#2
Noobie  
Posts:
1134
Joined:
22-Apr-2014 1:35pm
Location:
Jacksonville, FL
I believe the standard mileage rate is the same.
They probably mean traditional fueling station costs are zero.
Yes, it is most likely appropriate, where you have gas/diesel cost with normal vehicles, you have electric costs for electric vehicles.
Some places are doing charging stations in public at little or no costs-Tesla being one example.

I have not yet had a client who had this issue. most likely you would have to get a separate meter installed if you are using anything other than the standard mileage rate. Depreciation wise-you better hope the vehicle is an SUV over 6k gvwr. Otherwise, it will take a very long time to get fully depreciated, unless they sell it.
 

#3
Posts:
3694
Joined:
21-Apr-2014 11:24am
Location:
North Carolina
Thought I would revive this thread, rather than posting a new one as I think the posts above are pertinent to the discussion I hope to have.

New client will be able to take home office expenses, and it is by no means certain that we will take safe harbor. However, he is also thinking about acquiring an electric car, which he will use for business. So if we use actual expenses as the basis for home office and standard mileage for auto, isn't he going to be double-dipping? Yet there seems to be nothing in law to stop him. Do we have an ethical responsibility to take all the circumstances into account in computing total income?
 

#4
Posts:
8151
Joined:
4-Mar-2018 9:03pm
Location:
The Office
The cash flow differences between internal combustion engine (ICE) vehicles and electric vehicles (EVs) are vastly different. EVs generally cost more up front but have lower annual maintenance and "fuel" costs...until the battery array looses enough capacity to justify replacement that is. Then another large lump sum is paid and you get more years of low carrying costs.

What I'm getting at is that ICEs are still probably lower cost than EVs when you look at the long-term life cycle. No one is defrauding the Treasury by taking the standard mileage rate on an EV. That argument only compares the electricity cost per mile vs the gasoline/diesel cost per mile and doesn't examine the big picture.

SumwunLost wrote:Do we have an ethical responsibility to take all the circumstances into account in computing total income?


We always have a responsibility to behave ethically. But the way I'm interpreting your question is: "do we have a moral reason to deny a client advantageous tax treat that they are otherwise entitled to by law". Nope, never. Behave ethically, but check your own sense of morality at the door in this business.
 

#5
Posts:
3694
Joined:
21-Apr-2014 11:24am
Location:
North Carolina
Ah well, now that I know that the lifetime cost of an EV is likely more than that of an ICE, my ethical dilemma disappears like snow off a dyke in June. Thank you. My concern was that he would get mileage (which covers fuel costs) and would get a portion of it again when taking the home office deduction - always assuming he recharges at home.
 

#6
Posts:
8151
Joined:
4-Mar-2018 9:03pm
Location:
The Office
Technically, we are supposed to allocate expenses like electricity and internet, and not apportion by square footage. The latter may be appropriate for depreciation and heating/cooling costs, but may not be for electricity due to personal items like an electric oven (or personal use EV) using a disproportionate amount of electricity compared to a home office.

At least that's what I remember reading in the 8829 instructions... I imagine that's rarely applied in practice however, especially with the small business DIYers.
 

#7
mscash  
Posts:
517
Joined:
28-Apr-2014 1:26pm
Location:
Modesto, California
If you don't fully use a particular component of the standard mileage rate, it's a gift.
 


Return to Taxation



Who is online

Users browsing this forum: AlexCPA, Google [Bot], Google Adsense [Bot] and 52 guests