Can I deduct 100% of my car if I use it mostly for business?

Only if you use it 100% for business — which is nearly impossible to prove for a personal vehicle. The deduction is proportional to actual business use. If you drove 20,000 miles total and 14,000 were for business (70%), you deduct 70% of your vehicle costs. Mixed-use is fine; the deduction just scales with the business percentage.

Which method saves more money — standard mileage or actual expenses?

It depends on your vehicle and how much you drive. The standard mileage rate is simpler and works well for fuel-efficient vehicles. Actual expenses often produce larger deductions for expensive vehicles, high-maintenance vehicles, or owners who drive a lot of total miles. Many CPAs recommend calculating both in the first year and choosing the higher one — since once you choose actual expenses, you generally can't switch to standard mileage later for that vehicle.

What counts as a business trip?

Any trip made for a legitimate business purpose: client visits, going to a vendor or supplier, attending a business meeting, running business errands, going to a second work location if you have a home office, traveling to a training or conference. The business purpose must be clear and documentable.

What doesn't count as a business trip?

Your commute from home to your primary office (even if it's far). Personal errands. Trips that are partly business and partly personal (only the business portion counts). Stopping at a grocery store on the way home from a client meeting means the grocery portion isn't deductible, though the business-purpose portion still is.

I work from home — does that change how commuting rules work?

If your home is your primary business location (you have a legitimate home office), then trips from your home to client sites, meetings, or other business locations may qualify as deductible business mileage — because you're traveling from your place of business, not from a personal residence to work. This is one of the real tax benefits of a qualifying home office.

Do I need to own the car to deduct it?

No. If you lease a vehicle, you can use the standard mileage rate or the actual expense method (actual lease payments × business use %). There are some luxury auto limits that apply to leased vehicles, similar to the depreciation limits on owned vehicles.

Tax deductions

Can I Deduct My Car as a Business Expense?

Yes — but only the business portion. Here's how the two methods work, what actually qualifies as business mileage, why your commute doesn't count, and what the IRS wants to see.

Written by Matt Reese, CPA · 6 min read · Published April 2026·Share on LinkedIn

Key Takeaways

You can only deduct the business-use portion of your vehicle — personal miles are never deductible.
There are two methods: standard mileage rate (cents per mile) and actual expenses (real costs × business use %). You choose one per vehicle when you first use it for business.
Your daily commute from home to a regular office is not deductible. Trips to client sites, supply runs, and business meetings are.
You must keep a contemporaneous mileage log — date, destination, business purpose, miles. 'I drove a lot for work' is not a mileage log.
Heavy vehicles (over 6,000 lbs GVWR) may qualify for larger first-year deductions under Section 179 or bonus depreciation — but limits apply.

The short answer: yes, but proportionally

You can deduct the business-use portion of your vehicle costs. If you use a car 60% for business and 40% for personal use, you deduct 60% of the eligible costs. The IRS doesn’t expect your car to be 100% business — mixed use is normal and fine. But they do expect you to track it accurately.

There are two methods for calculating the deduction. You pick one per vehicle, and for most vehicles you can’t switch methods later.

Method 1: Standard mileage rate

The simpler method. The IRS publishes a cents-per-mile rate each year (check IRS.gov for the current year’s rate — it changes annually based on fuel costs and vehicle operating costs). You multiply your business miles by that rate and deduct the result.

Example: You drove 12,000 business miles last year. Multiply by the IRS rate. That’s your deduction.

What it covers: the rate is designed to encompass gas, oil, maintenance, tires, and a portion of insurance and registration. You cannot additionally deduct those costs separately if you use the standard rate. You can separately deduct parking fees and tolls related to business trips.

Who it works well for:Fuel-efficient vehicles, owners who want simplicity, and anyone who doesn’t drive a high-cost vehicle.

Check the IRS rate for the current year

The standard mileage rate adjusts annually. The IRS publishes the new rate each January in a revenue procedure. Search “IRS standard mileage rate [current year]” or check Publication 463 on IRS.gov to confirm you’re using the right number.

Method 2: Actual expenses

Track every real cost of operating the vehicle, then multiply by your business-use percentage:

Gas and oil
Maintenance and repairs
Tires
Insurance
Registration fees
Lease payments (if leased)
Depreciation (if owned) — see note on luxury auto limits below
Car washes (if used for business)

Your business-use percentage = business miles ÷ total miles for the year. Track both. If you drove 18,000 total miles and 11,000 were business, your business-use percentage is 61%.

Who it works well for: Expensive vehicles (SUVs, trucks, specialty vehicles), high-maintenance vehicles, owners with high vehicle costs, and S-corp owners who may be able to run the vehicle through the business entirely.

	Standard mileage	Actual expenses
Simplicity	Simple — one number times miles	More work — track every cost
Records needed	Mileage log only	Mileage log + all expense receipts
Switching methods	Can switch to actual later (with limits)	Generally cannot switch to standard later
Works best for	Low-cost, fuel-efficient vehicles	Expensive or high-cost vehicles
Parking/tolls	Deductible separately	Deductible separately
Depreciation	Built into the rate	Calculated separately (with limits)

What counts as business mileage

Deductible:

Driving to client meetings, job sites, or customer locations
Trips to vendors, suppliers, or the bank for business purposes
Driving to a temporary work location different from your regular office
Business errands: picking up supplies, delivering products
Driving to networking events, conferences, training sessions
If you have a qualifying home office: driving from home to any business location

Not deductible:

Commuting — driving from your home to your regular office
Personal errands mixed in with business trips
Speculative or prospective business trips that didn’t result in actual business activity
Driving to and from lunch (unless you’re traveling away from your regular business location)

Commuting is never deductible — even if it's far

The IRS has been consistent for decades: commuting from your home to your primary work location is a personal expense, not a business one. The distance doesn’t matter. If you drive 90 minutes each way to your office, that’s still a non-deductible commute. The exception is if your home is your principal place of business (qualifying home office) — in that case, trips from home to client sites are business travel.

The mileage log: what the IRS actually wants

The IRS requires “contemporaneous” records — meaning you logged the information at or near the time of each trip, not reconstructed months later from memory. Your mileage log needs to capture:

Date of the trip
Starting location and destination
Business purpose (what was the business reason for this trip?)
Miles driven
Odometer readings at the beginning and end of the year (for actual expense method)

The easiest way: a mileage tracking app. MileIQ, Stride, TripLog, and Everlance all run in the background on your phone, detect when you’re driving, and let you swipe to classify each trip as business or personal. Some integrate directly with bookkeeping software.

A spreadsheet works too. A written log works. What doesn’t work: estimating at year-end how much you drove for business.

Heavy vehicles and Section 179

If your vehicle has a gross vehicle weight rating (GVWR) over 6,000 pounds and is used for business, you may be able to deduct a larger amount in the first year through Section 179 or bonus depreciation. This is why you hear about business owners buying SUVs or trucks before year-end.

The rules are real, and the deductions can be significant — but they come with limits: the vehicle must be used more than 50% for business, luxury auto depreciation caps still apply to some vehicles, and “listed property” rules add complexity. If you’re considering a significant vehicle purchase for the deduction, run it by your CPA first. The tax benefit depends heavily on your specific situation.

You might also read

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Business Expense Categories: What to Track and How to Enter It in QuickBooks or Xero

The most common expense categories, QuickBooks and Xero names, and the special rules for auto, meals, and home office.

Frequently asked

Questions owners actually ask

Can I deduct 100% of my car if I use it mostly for business?: Only if you use it 100% for business — which is nearly impossible to prove for a personal vehicle. The deduction is proportional to actual business use. If you drove 20,000 miles total and 14,000 were for business (70%), you deduct 70% of your vehicle costs. Mixed-use is fine; the deduction just scales with the business percentage.
Which method saves more money — standard mileage or actual expenses?: It depends on your vehicle and how much you drive. The standard mileage rate is simpler and works well for fuel-efficient vehicles. Actual expenses often produce larger deductions for expensive vehicles, high-maintenance vehicles, or owners who drive a lot of total miles. Many CPAs recommend calculating both in the first year and choosing the higher one — since once you choose actual expenses, you generally can't switch to standard mileage later for that vehicle.
What counts as a business trip?: Any trip made for a legitimate business purpose: client visits, going to a vendor or supplier, attending a business meeting, running business errands, going to a second work location if you have a home office, traveling to a training or conference. The business purpose must be clear and documentable.
What doesn't count as a business trip?: Your commute from home to your primary office (even if it's far). Personal errands. Trips that are partly business and partly personal (only the business portion counts). Stopping at a grocery store on the way home from a client meeting means the grocery portion isn't deductible, though the business-purpose portion still is.
I work from home — does that change how commuting rules work?: If your home is your primary business location (you have a legitimate home office), then trips from your home to client sites, meetings, or other business locations may qualify as deductible business mileage — because you're traveling from your place of business, not from a personal residence to work. This is one of the real tax benefits of a qualifying home office.
Do I need to own the car to deduct it?: No. If you lease a vehicle, you can use the standard mileage rate or the actual expense method (actual lease payments × business use %). There are some luxury auto limits that apply to leased vehicles, similar to the depreciation limits on owned vehicles.

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Educational content only.This article is for informational purposes and does not constitute tax, legal, or investment advice. Every owner’s facts are different; consult a qualified CPA and advisor before acting. Tax and accounting services are provided through Matt Reese, CPA; investment advisory services are provided through Measured Risk Portfolios, a registered investment adviser. Matt Reese, CPA and Measured Risk Portfolios are separate entities; clients are not required to engage both.