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Can I deduct can you deduct gas as a business expense?

TL;DR

Yes, you can generally deduct gas as a business expense if it is used for business purposes. However, it must be properly documented and only the business-use portion is deductible.

Detailed Answer

Gas expenses can be deducted if they are directly related to the operation of your business. This typically applies to vehicles used for business purposes, such as visiting clients, traveling between job sites, or delivering goods. Personal use of the vehicle is not deductible. You can choose between deducting actual expenses (including gas) or using the standard mileage rate, which covers all vehicle-related costs. The choice should be based on which method provides a larger deduction, but you must be consistent in your method throughout the tax year. For example, if you use your car 70% for business and 30% for personal use, you can only deduct 70% of the gas expenses if you opt for the actual expense method.

Where to Put It on the Tax Form

Schedule C, Line 9 for car and truck expenses if using actual expenses; Line 44 if using the standard mileage rate.

Real World Example

A freelance photographer who drives to various locations for shoots can deduct the gas expenses for these trips. If they spend $2,000 on gas in a year and 80% of their driving is for business, they can deduct $1,600 using the actual expense method.

Calculation Required

A calculation is required for this deduction.

To calculate the deductible amount using the actual expense method, multiply the total gas expenses by the percentage of business use. For example, if total gas expenses are $2,000 and business use is 70%, the deduction is $2,000 x 0.70 = $1,400.

Audit Risk & Documentation Tips

Moderate audit risk. Keep detailed records such as mileage logs, receipts, and a calendar of business activities. Logs should include dates, destinations, and purpose of trips. Consistent and thorough documentation will help substantiate the deduction if audited.

IRS Reference

IRS Publication 463, Travel, Gift, and Car Expenses; IRS Publication 535, Business Expenses.

Relevant Industries

FreelancersReal Estate AgentsConsultantsDelivery ServicesSales Representatives

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 15, 2025

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