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Can I deduct is gas a business expense?

TL;DR

Gas can be deducted as a business expense if it is used for business purposes, but it must be substantiated with proper records. Personal use of gas is not deductible.

Detailed Answer

Gas expenses are deductible when they are directly related to business activities. For instance, if you drive your car for business meetings, client visits, or deliveries, the gas used for these trips can be deducted. However, commuting from home to your regular place of business is considered personal travel and is not deductible. You can choose between deducting actual expenses, which include gas, or using the standard mileage rate. If you opt for actual expenses, you must keep detailed records and receipts of all gas purchases. It's important to differentiate between business and personal use, especially if the vehicle is used for both purposes.

Where to Put It on the Tax Form

Schedule C, Line 9 for car and truck expenses. If using actual expenses, additional details may be required on Form 4562.

Real World Example

A freelance photographer uses their car to travel to various photo shoots. They track their gas expenses and keep receipts, totaling $1,200 for the year. They can deduct this amount on their Schedule C, provided they have documented the business purpose of each trip.

Calculation Required

A calculation is required for this deduction.

To calculate the deductible portion, keep a log of total miles driven and business miles driven. Calculate the percentage of business use by dividing business miles by total miles and apply this percentage to your total gas expenses.

Audit Risk & Documentation Tips

The audit risk is moderate, especially if the vehicle is used for both personal and business purposes. Keep detailed mileage logs, receipts, and a calendar of business activities to substantiate the deduction. Use apps or spreadsheets to maintain accurate records.

IRS Reference

IRS Publication 463 (Travel, Gift, and Car Expenses)

Relevant Industries

FreelancersReal Estate AgentsConsultantsDelivery Services

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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 25, 2025

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