If you sell a vehicle for which the Standard Mileage rate was used for deduction purposes in your business, there is a depreciation adjustment that must be made when accounting for the sale on your tax return. Because depreciation expense was already included in the Standard Mileage rate (the IRS figures it into the calculation of the rate each year), this depreciation amount must be calculated in order to adjust the basis of the vehicle when you sell that vehicle.

To enter the information for the sale of the vehicle in the TaxAct program (if you need help accessing Schedule C, go to our Schedule C - Entering Sole Proprietorship in Program FAQ):

1. From within your Schedule C, continue with the interview process until you reach the screen titled Great! Let's get started on expenses for [Business], then click Vehicle.
2. On the screen titled Would you like to review vehicle expenses for this business?, click Yes.
3. Continue with the interview process to enter your information.

If, on the screen titled Vehicles - Actual or Standard, you had selected "Standard mileage rate," you will not see the screens to enter the disposal information. This is because when taking the Standard Mileage rate, depreciation is not necessary as it's already included. You will want to continue until you reach the screen titled Asset Sale - Assets Sold, where you can enter the disposal information since depreciation was not entered previously. Click Yes and proceed through the interview screens; OR

If, on the screen titled Vehicles - Actual or Standard, you had selected "Actual expenses," you can continue through the Q&A until you reach the screen titled Depreciation - Disposed to start entering the disposal information.

See IRS Publication 463 for more information.