Using your car for work? You may be able to deduct significant vehicle expenses. Learn about the standard mileage rate vs. actual expense method.

Business Vehicle Deductions

Two Methods to Choose From

1. Standard Mileage Rate

2025 Rate: 67 cents per mile for business use
Simpler to track and calculate
Must choose this method in the first year you use the vehicle for business

Includes:

Gas
Maintenance
Insurance
Depreciation

What you still deduct separately:

Parking fees
Tolls
Loan interest (proportional)

2. Actual Expense Method

Deduct the actual costs of operating the vehicle, multiplied by the business-use percentage.

Included expenses:

Gas and oil
Insurance
Repairs and maintenance
Registration fees
Depreciation or lease payments

Mileage Log Requirements

Regardless of method, you must maintain a log with:

Date of trip
Business purpose
Starting and ending odometer readings
Destination

Section 179 and Bonus Depreciation

For business vehicles (especially SUVs over 6,000 lbs GVWR), you may be able to use Section 179 or bonus depreciation to write off a large portion of the cost in year one.

Use a vehicle for business? Let our team calculate which method saves you more.

How to Deduct Your Vehicle for Business