Biz Use of Auto Tax Deductions

Expenses for the business use of your vehicle may be deducted by using either the standard mileage rate or by using the actual expenses of owning and operating the automobile.
Which one of the 2 methods provides the larger deduction depends on various factors, including the # of miles driven per year, the cost and size of the vehicle, the anticipated repair costs, and the vehicle's gas mileage.
IRS does require that you maintain timely a log of the business miles driven. There are auto logs available that are designed to easily let you do this. Some business owners do use their best estimates for this calculation, but are at risk, on audit, for having IRS disallow their claimed deduction. Agent's 1st comment is "show me your mileage log".

Sample Mileage Log

Deduct Car and Truck Expenses

The easiest way to calculate automobile expense deductions is to use the standard mileage rate. You apply an IRS-determined rate to the business miles driven. For 2015 the rate per mile is 57.5 cents per mile.

The standard mileage rate allowance includes all expenses except interest on the vehicle, or parking fees and tolls. These excepted expenses are deducted in addition to the rate.
Sometimes it's beneficial to compute your expense both ways so that you can decide which method to use. However, once you choose a method for a specific vehicle, you can only change from standard mileage rate method to the actual cost method. You cannot change from the actual cost method to the standard mileage rate.

The Lowdown on Auto Expense Deductions

Questions that have to be answered, when claiming business use of auto deductions-

• Do you have objective evidence of your automobile mileage?
• Is your evidence in writing?
• What is your total mileage for the car for the year?
• What is your business mileage for each car?
• What is your commuting mileage?

Without question, claims for automobile expenses are the most frequently audited – the number one deduction that the IRS checks out.


If you have a home office that qualifies as your principal place of ­business, you can deduct the cost of any trips you make from home to another business location. You can get a lot of travel deductions this way. For example, you can deduct the cost of driving from home to a client’s office or to attend a business-related seminar. The commuting rule doesn’t apply if you work at home because, with a home office, you never commute to work (you’re there already).

Deducting "Commuting" Expenses With A Home Office

Post Updated April 19, 2015