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How do I deduct is gas tax deductible for business on my taxes?

TL;DR

Gas expenses for business use are generally deductible, but only if they are directly related to business activities. Personal use of gas is not deductible.

Detailed Answer

Gas expenses can be deducted as part of the actual vehicle expenses method when calculating vehicle-related deductions. To qualify, the vehicle must be used for business purposes, and you must keep detailed records of the business use. This includes maintaining a log of miles driven for business, as well as receipts for gas purchases. If you use the standard mileage rate method, gas is not separately deductible because it is included in the mileage rate. It's important to distinguish between personal and business use, as only the business portion is deductible. For example, if you drive 10,000 miles in a year and 6,000 of those are for business, you can deduct 60% of your gas expenses.

Where to Put It on the Tax Form

Schedule C, Line 9 for car and truck expenses if using actual expenses method.

Real World Example

A freelance graphic designer uses their car to meet clients and purchase supplies. They drive 5,000 miles for business out of a total of 8,000 miles driven in the year. They spent $1,200 on gas. They can deduct 62.5% of their gas expenses, which amounts to $750, on their Schedule C.

Calculation Required

A calculation is required for this deduction.

Calculate the business-use percentage by dividing business miles by total miles driven. Multiply this percentage by total gas expenses to determine the deductible amount.

Audit Risk & Documentation Tips

Moderate audit risk. Keep detailed mileage logs, including dates, destinations, and purpose of trips. Save all gas receipts and any other documentation that supports the business use of the vehicle. Consider using a mileage tracking app to ensure accuracy.

IRS Reference

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

Relevant Industries

FreelancersReal Estate AgentsConsultantsSales ProfessionalsDelivery 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 15, 2025

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