If you use your car for business, claim vehicle expenses that can save you significant money. Knowing how to properly claim and maximize these vehicle-related expenses is key. Continue reading to learn more about how you can make the most of your car write-offs.
Claiming Vehicle Expenses Rules
While operating a car comes with costs, some of these costs can be written off if they are for business purposes. However, it depends on how much you use your vehicle for business purposes versus personal use.
Mixed use. You can write off the portion related to business if you split the car’s use between personal and business purposes. For example, if you use the vehicle for business 40% of the time. You can write off 40% of the total costs or the miles driven.
Solely for business. Using your vehicle exclusively for business means you can write off the full cost of maintenance and ownership.
Here’s how to ensure you make the most of your car expenses.
01. Track Business vs. Personal Use
Accurate record-keeping is crucial. The IRS requires that you document the percentage of time your vehicle is used for business purposes. This percentage will determine how much of your vehicle expenses are deductible.
02. Choose the Right Deduction Method
You have two options for claiming vehicle expenses:
- Standard Mileage Rate. In 2025, the standard mileage rate is $0.655 per mile for business use. This method is simpler but may result in a smaller deduction.
- Actual Expense Method. This option allows you to deduct actual costs, such as fuel, maintenance, repairs, insurance, lease payments, and depreciation.
Compare both methods to see which one gives you the larger deduction.
03. Don’t Miss Additional Deductions
Beyond mileage and direct expenses, there are other tax write-offs you can take advantage of. For example, tolls, parking fees, and interest on auto loans (if you’re self-employed).
04. Leverage Section 179 and Bonus Depreciation
For business vehicles, Section 179 allows you to deduct a large portion of the vehicle’s cost in the year you purchase it. Bonus depreciation can also apply, helping you write off even more in the first year.
05. Keep Detailed Records
To maximize your deduction and stay compliant with IRS regulations, keep receipts, mileage logs, and maintenance records. Using a mileage-tracking app can make this process easier.
Final Tip
The tax experts at The Ray Group can ensure you’re claiming your vehicle expenses correctly. With the right strategy, we can reduce your taxable income and keep more money in your pocket.
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