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Is can you deduct gas as a business expense a valid tax write-off?

TL;DR

Yes, gas can be deducted 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 are deductible when they are directly related to the operation of a business vehicle. This means the vehicle must be used for business purposes, such as traveling to meet clients, delivering goods, or attending business meetings. Personal use of the vehicle is not deductible. To claim this deduction, you can either use the actual expense method, which includes gas, or the standard mileage rate, which incorporates gas and other vehicle expenses. If using the actual expense method, you must keep detailed records of all vehicle-related expenses and calculate the business-use percentage. For example, if a vehicle is used 70% for business and 30% for personal use, only 70% of the gas expenses are deductible.

Where to Put It on the Tax Form

Schedule C, Line 9 for car and truck expenses. If using Form 2106, it would be part of the vehicle expenses section.

Real World Example

A freelance graphic designer drives to meet clients and attend networking events. She tracks her mileage and determines that 80% of her vehicle use is for business. She spends $1,500 on gas annually. Using the actual expense method, she can deduct $1,200 (80% of $1,500) as a business expense.

Calculation Required

A calculation is required for this deduction.

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

Audit Risk & Documentation Tips

Moderate. Keep a detailed mileage log, including dates, destinations, and purpose of each trip. Save all gas receipts and maintain records of total miles driven. Consider using a mileage tracking app for accuracy.

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 25, 2025

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