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Maximize Your Tax Savings: Deducting More Than One Business Vehicle

Hello, savvy tax enthusiasts! Today, we're delving into an intriguing scenario that could significantly maximize your tax savings. Meet Attorney Mel Practess, the proud owner of a law firm who also happens to drive a splendid $60,000 BMW for his business needs.

But wait, there's a twist: Mel adores his BMW so much that he decides to acquire an identical $60,000 model for his wife, Sharpe. Although Mel occasionally takes Sharpe's car for a spin, he never employs it for business. In contrast, nearly 90 percent of Mel's mileage on his own BMW serves business purposes, and he rightfully claims deductions for these miles.

Now, as Mel peruses articles from the Bradford Tax Institute, a thought crosses his mind: "Could I amplify my deductions by utilizing both cars for business?"

The pivotal question emerges: Can Mel discover additional tax deductions by driving both his and Sharpe’s car for business? Let's explore the options:

A. No, because taxpayers can deduct only one business vehicle at a time.

B. No, because you can’t correctly log business mileage if you use more than one vehicle for business.

C. Yes, as long as Mel drives more miles than Sharpe and the adjusted tax basis of both cars is roughly the same.

D. No, if he uses IRS mileage rates to claim his deductions.

Correct Answer: C. Mel can—and should—use and claim business use deductions for both cars.

Now, let's break it down and understand why Mel's move is quite clever:

The Real-World Scenario

This real-world scenario underscores a critical but often overlooked principle of business vehicle deductions, especially for married couples: you're not limited to claiming deductions for just one vehicle.

But the real magic happens when you can answer "yes" to these three conditions:

1. **You actually use each vehicle for business.**

2. **You drive more miles than your spouse does for business.**

3. **You own vehicles that are somewhat similar on an adjusted basis (usually the cost of the vehicle).**

In Mel's case, he checks all three boxes, which means he can pocket more after-tax cash benefits by using both vehicles for business.

Why Answer A Is Wrong

Answer A is incorrect because the IRS actually allows taxpayers to claim deductions on multiple business vehicles. You can find proof of this in IRS Publication 463, where it explicitly mentions that using the standard mileage rate for deducting car expenses is acceptable for multiple vehicles, as long as they are not used simultaneously.

Why Answer B Is Wrong

Answer B is also a bit off the mark. You can, in fact, log business mileage for more than one vehicle—either in a single log or separate logs for each vehicle.

Why Answer D Is Wrong

Answer D isn't the best choice either. Mel can accrue significant tax savings by using a two-car strategy with or without the use of IRS mileage rates. The key here is that the IRS includes depreciation in the mileage rate, so you get a similar net increase in depreciation benefit whether you use the mileage rate or the actual expense method.

Let's see how Mel benefits from using both cars:

Before—Driving One BMW

- Mel and Sharpe have an adjusted basis of $60,000 in each of the BMWs.

- Mel drives his BMW 93.3 percent for business (28,000 business miles versus 2,000 personal). Sharpe drives her BMW 8,000 miles, all personal.

- Maximum depreciation and/or Section 179 deductions: $55,980 (i.e., 93.3 percent of $60,000 on Mel’s BMW).

After—Driving Both BMWs

- Mel switches cars with Sharpe each week. He now has 73.7 percent business use on his BMW and 73.7 percent business use on Sharpe’s BMW (28,000 business miles ÷ 38,000 total miles).

- Maximum depreciation and/or Section 179 deductions: $88,440 (i.e., 73.7 percent of $60,000 on Mel’s BMW plus 73.7 percent of $60,000 on Sharpe’s BMW).

The bottom line? Using the two-car strategy increased Mel's potential deductions significantly, putting an extra $32,460 in his pocket ($88,440 instead of $55,980). And the best part is, he didn't have to spend extra money or drive additional miles to do it. All he needed was to understand the rules!

Now, remember, these are potential deductions. The final number depends on the sales prices of the BMWs, which offset the depreciation. But Mel and Sharpe definitely come out ahead with the two-car strategy.

So, what's the takeaway here?


The IRS doesn't limit you to claiming deductions on just one business vehicle. You can potentially maximize your tax benefits by utilizing more than one vehicle for business purposes, especially when you:

- Use each vehicle predominantly (more than 50 percent) for business.

- Drive more business miles than your spouse.

- Own vehicles with closely aligned adjusted bases (typically the vehicle cost).

The IRS supports this stance, as evidenced in IRS Publication 463 and IRS Form 4562. Court rulings have also upheld taxpayers' rights to claim business deductions on multiple vehicles in the same tax year.

To see if this strategy could work for you, check out the Two-Car Magic Formula found in your Subscriber Resources.

So there you have it, a tax-savvy move that could put more money in your pocket. Remember to consult with a tax professional for personalized advice, but don't miss out on potential deductions if you meet these criteria. Happy driving and saving!

You can reach our CEO and founder Peter Ellefson anytime at

Disclaimer: Laws and regulations are subject to change, and readers are advised to consult EPL advisors for personalized advice and compliance with specific state requirements. This information is not specific advice and is meant for general education.


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