How to Write Off Business Use of Your Vehicle

Calculate and claim vehicle deductions using standard mileage or actual expense methods for maximum tax savings.

1. Track every business mile with documentation. Log date, destination, business purpose, and odometer readings for all business trips. Use a mileage app or paper logbook — the IRS requires contemporaneous records. Personal commuting to your regular workplace doesn't count as business mileage.
2. Calculate your business use percentage. Divide total business miles by total miles driven for the year. If you drove 15,000 miles total with 9,000 for business, your business use percentage is 60%. This percentage determines how much of actual expenses you can deduct.
3. Compare standard mileage vs. actual expense methods. Standard mileage: multiply business miles by the IRS rate (67 cents in 2026). Actual expenses: track gas, repairs, insurance, depreciation, and multiply total costs by business use percentage. You can't switch methods year-to-year if you've used actual expenses or claimed depreciation.
4. Choose the method that gives you the larger deduction. Run both calculations and pick the higher number. Standard mileage works best for high-mileage, lower-cost vehicles. Actual expenses typically win with expensive vehicles, low annual mileage, or high maintenance costs.
5. File the deduction on your tax return. Report vehicle expenses on Schedule C (sole proprietors), Form 1120 (corporations), or Form 1065 (partnerships). Keep all receipts and mileage logs for at least three years. Add parking fees and tolls to either method as separate business expenses.