4 ms·

Mr. Money Moustache's cost estimates are wildly unrealistic. I ran a TCO on my own vehicle and it came out to about 35-40 cents per mile, much less kilometer. T

by scythe 9y ago

Mr. Money Moustache's cost estimates are wildly unrealistic. I ran a TCO on my own vehicle and it came out to about 35-40 cents per mile, much less kilometer. The MIT study uses 30 cents per mile, and this sounds right if you are being frugal and driving carefully, but apparently even this is being revisited. The idea that the government would not let you over-deduct is, in my opinion, a big mistake -- lawmakers know that people who work out of their cars are generally low-paid and therefore do not contribute much to the tax base in the first place, so it is a higher priority to avoid screwing over the poor than to nickel-and-dime them. Furthermore tax laws in America are influenced by some pro-car, anti-tax elements, who will of course act to make taxes lower for drivers.

ghaff 9y ago
If one assumes a fair and rational basis for the standard deductions, it's that people are driving their personal cars for business purposes. Those cars weren't purchased specifically to drive for business and they may not be optimized for economy. And, as you say, many people who put a lot of miles on their personal cars for business are probably average to the lower end of the income scale. The 30 cents a mile in this study seems reasonable for a modest Prius or Camry assuming that driving empty to pick up passengers isn't a big portion of the total driving. It's probably close to the low-end though for acceptable vehicles.
- toomuchtodo 9y ago
  You’re able to deduct the miles driving while actively seeking a passenger. My Lyft driver was sharing this hack with me while driving me home from the airport yesterday; he turns the app on while driving home from work everyday. If he has a ride, good. If not, he’s gotten to deduct his commute home as a business expense.
- user5994461 9y ago
  Your numbers are way too low as far as I am concerned. For comparison, you can have a look at France tax deductions. They account for the type of vehicle. https://www.service-public.fr/particuliers/actualites/A12350 https://www.service-public.fr/particuliers/actualites/A12350 The absolute minimum price is 0.286 euro * km. That is if you drive more than 20 000 km a year and have the most economic car of all.
  - scythe 9y ago
    Fuel is way more expensive in France, though, and it wouldn't surprise me if maintenance were as well, considering that CPI is significantly higher. Also see my explanation of why lawmakers would overestimate deductions. Also the minimum deduction in that table is 0.245 euro/km which is for 5000-20000 km although it assumes you drive 5000 km/year at a higher price, which most people will do for personal use anyway.
    - user5994461 9y ago
      The minimum deduction is the "d x 0,286". Don't get confused by the French. It's for the "smallest" type of car, I think you actually need a motorbike to reach that rate. The most economic Prius from this year would fall in the rate d x 0,332. Yes, there are high taxes on gas but it's not significant when discussing the total costs including maintenance, insurance and depreciation. Keep in mind the exchange rate as well.

by scythe 9y ago

ghaff 9y ago

If one assumes a fair and rational basis for the standard deductions, it's that people are driving their personal cars for business purposes. Those cars weren't purchased specifically to drive for business and they may not be optimized for economy. And, as you say, many people who put a lot of miles on their personal cars for business are probably average to the lower end of the income scale. The 30 cents a mile in this study seems reasonable for a modest Prius or Camry assuming that driving empty to pick up passengers isn't a big portion of the total driving. It's probably close to the low-end though for acceptable vehicles.

toomuchtodo 9y ago
You’re able to deduct the miles driving while actively seeking a passenger. My Lyft driver was sharing this hack with me while driving me home from the airport yesterday; he turns the app on while driving home from work everyday. If he has a ride, good. If not, he’s gotten to deduct his commute home as a business expense.
user5994461 9y ago
Your numbers are way too low as far as I am concerned. For comparison, you can have a look at France tax deductions. They account for the type of vehicle. https://www.service-public.fr/particuliers/actualites/A12350 https://www.service-public.fr/particuliers/actualites/A12350 The absolute minimum price is 0.286 euro * km. That is if you drive more than 20 000 km a year and have the most economic car of all.
- scythe 9y ago
  Fuel is way more expensive in France, though, and it wouldn't surprise me if maintenance were as well, considering that CPI is significantly higher. Also see my explanation of why lawmakers would overestimate deductions. Also the minimum deduction in that table is 0.245 euro/km which is for 5000-20000 km although it assumes you drive 5000 km/year at a higher price, which most people will do for personal use anyway.
  - user5994461 9y ago
    The minimum deduction is the "d x 0,286". Don't get confused by the French. It's for the "smallest" type of car, I think you actually need a motorbike to reach that rate. The most economic Prius from this year would fall in the rate d x 0,332. Yes, there are high taxes on gas but it's not significant when discussing the total costs including maintenance, insurance and depreciation. Keep in mind the exchange rate as well.