Actual Car/Vehicle Expenses

If you use your car for business purposes, you may be able to deduct car expenses. You generally can use one of the two following methods to figure your deductible expenses.

  • Standard mileage rate
  • Actual car expenses

Per IRS Publication 463 Travel, Gift, and Car Expenses, on page 15:

Actual Car Expenses

If you don’t use the standard mileage rate, you may be able to deduct your actual car expenses.

TIP If you qualify to use both methods, you may want to figure your deduction both ways to see which gives you a larger deduction.

Note. This is done for you in the TaxAct® program if you enter all of the information requested in the Federal Q&A interview.

Actual car expenses include:

Lease payments Registration fees
Licenses Insurance Repairs
Gas Garage rent Tires
Oil Parking fees  

If you have fully depreciated a car that you still use in your business, you can continue to claim your other actual car expenses. Continue to keep records, as explained later in chapter 5.

Business and personal use. If you use your car for both business and personal purposes, you must divide your expenses between business and personal use. You can divide your expense based on the miles driven for each purpose.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.