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LearnFAQSelf-Employed & Small Business

How do I deduct vehicle costs — standard mileage or actual expenses?

Answer

You can deduct business driving two ways, but only business miles count — never commuting. The standard mileage method multiplies business miles by the IRS rate (67 cents per mile for 2024, adjusted yearly); it's simple and only requires a mileage log. The actual-expense method deducts the business-use percentage of real costs — gas, insurance, repairs, depreciation, lease payments — which can win for expensive vehicles but demands detailed records. A key rule: if you want the option to switch methods later, you must use standard mileage in the first year you place the car in service. Either way, keep a contemporaneous log (date, miles, purpose) — a phone app works well. Reconstructed logs created at audit time rarely survive scrutiny. For most people with an ordinary car, standard mileage wins on simplicity.

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