If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period. For leases that began on or before December 31, 1997, the standard mileage rate must be used for the entire portion of the lease period (including renewals) that is after that date.

If you choose to use the standard mileage rate, you are considered to have chosen not to use the depreciation methods discussed later. This is because the standard mileage rate includes an allowance for depreciation. Also, you cannot claim the section 179 deduction (discussed later) if you use the standard mileage rate. If you change to the actual expenses method in a later year, but before your car is considered fully depreciated, you have to estimate the remaining useful life of the car and use straight line depreciation. See the exception in Methods of depreciation under Depreciation Deduction, later.

Standard mileage rate not allowed. You cannot use the standard mileage rate if you:

1.      Use the car for hire (such as a taxi),

2.      Operate two or more cars at the same time (as in fleet operations),

3.      Claimed a depreciation deduction using ACRS or MACRS (discussed later) in an earlier year,

4.      Claimed a section 179 deduction (discussed later) on the car,

5.      Claimed actual car expenses after 1997 for a car you leased, or

6.      Are a rural mail carrier who received a qualified reimbursement. (See Rural mail carriers, earlier.)

Two or more cars. If you own two or more cars that are used for business at the same time, you cannot use the standard mileage rate for the business use of any car. However, you may be able to deduct your actual expenses for operating each of the cars in your business. See Actual Car Expenses for information on how to figure your deduction.

You are not using two or more cars for business at the same time if you alternate using (use at different times) the cars for business.

The following examples illustrate the rules for when you can and cannot use the standard mileage rate for two or more cars.

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