Should I use the owner draw or auto expense category to account for business fuel and car repair expenses? I'm using mileage and I'm an LLC and sole prop.

You book the actual expenses during the tax year if you pay for it with company funds/CC

then at tax time, you either

use the mileage rate

or

actual expenses (fuel, oil, tires, depreciation, insurance, etc etc)

Thanks. If I determine that mileage is more advantageous one year but find the following year that auto expenses is more advantageous during tax time, are there any limitations for switching back and forth year to year? This is my first year as an LLC. 

Hello, @amandah.

When claiming deductions for vehicle-related expenses, you can choose either the standard mileage method or the actual expense method.

However, you'll have to choose the standard mileage rate to calculate vehicle expenses in the first year you use the car for business. By doing so, you can choose to switch back and forth between the methods from year to year without penalty.

Just a heads-up, you'll no longer be able to switch to standard mileage rate once you use actual expenses for the vehicle on the first year you used it for business. You must continue using the actual expenses method as long as you use that car for business. 

I'd suggest consulting with an accountant or a tax professional so you'll be guided in choosing which method will be the most advantageous for your business. You can read through this article for more information on how the two methods work: Differences between standard mileage and actual expenses. 

On the other hand, you can browse these articles to learn more about tracking mileage in QuickBooks:

• Track mileage in QuickBooks Online
• Manually track mileage for multiple vehicles

Lastly, you can read through these articles to learn more about claiming potential deductions:

• QuickBooks can do WHAT? Tracking your mileage
• Topic No. 510 Business Use of Car

Should you have other questions, don’t hesitate to visit us here.  I’m always here to help.