Can I Write This Off?

Can you write off can you deduct gas and mileage?

TL;DR

Yes, you can deduct either gas and oil expenses or mileage for business use of your vehicle, but not both. It's important to choose the method that provides the greater deduction and adhere to IRS guidelines.

Detailed Answer

You can deduct vehicle expenses using either the actual expense method, which includes gas, oil, repairs, insurance, and depreciation, or the standard mileage rate method, which is a flat rate per mile driven for business purposes. The standard mileage rate for 2023 is 65.5 cents per mile. To qualify, the vehicle must be used for business purposes, and personal use must be excluded. For example, a real estate agent driving to showings can deduct these expenses, but commuting from home to a regular office is not deductible. If you use the actual expense method, you must keep detailed records of all costs and allocate them between business and personal use.

Where to Put It on the Tax Form

Schedule C, Line 9 for car and truck expenses; Form 4562 for depreciation if using actual expenses.

Real World Example

A freelance graphic designer uses their car to meet clients and attend networking events. They drive 5,000 miles for business in 2023. Using the standard mileage rate, they can deduct $3,275 (5,000 miles x $0.655).

Calculation Required

A calculation is required for this deduction.

To calculate the deduction using the standard mileage rate, multiply the total business miles driven by the IRS mileage rate for the year. For actual expenses, calculate the total costs and multiply by the percentage of business use.

Audit Risk & Documentation Tips

Moderate audit risk. Keep a detailed mileage log, including dates, destinations, and business purposes. For actual expenses, retain receipts, invoices, and records of all vehicle-related expenses. Consider using apps or software to track mileage and expenses accurately.

IRS Reference

IRS Publication 463

Relevant Industries

FreelancersReal Estate AgentsConsultantsSales Professionals

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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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