When filing your taxes, you have two main methods to deduct car or truck expenses for business use: the standard mileage rate and the actual expense method.
- Standard Mileage Rate: This method allows you to deduct a fixed amount per business mile driven. It simplifies the process as you don’t need to track individual expenses like fuel, maintenance, or depreciation, although it is recommended to track both the mileage and the actual costs yearly.
- Actual Expense Method: This method involves deducting the actual costs of operating the vehicle for business purposes. This includes fuel, maintenance, repairs, insurance, registration fees, and depreciation expenses. Using this method, you can write off auto depreciation as part of the overall vehicle expenses.
References
Internal Revenue Service. “Topic No. 510, Business Use of Car.” http://www.irs.gov/taxtopics/tc510.
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