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Is how to write off gas as a business expense a business expense?

TL;DR

Gas expenses can be deducted as a business expense if they are directly related to business use. However, personal use of a vehicle is not deductible, and accurate records must be maintained to substantiate the business use portion.

Detailed Answer

Gas expenses are deductible when they are incurred for business purposes, such as driving to meet clients, attending business meetings, or transporting goods. The IRS allows taxpayers to deduct actual expenses (including gas) or use the standard mileage rate. Personal commuting costs are not deductible. For mixed-use vehicles, only the business-use portion is deductible, and taxpayers must keep detailed records, such as a mileage log, to differentiate between personal and business use. For example, if a vehicle is used 60% for business, only 60% of the gas expenses can be deducted.

Where to Put It on the Tax Form

Schedule C, Line 9 for car and truck expenses. If using Form 2106, include on Line 1.

Real World Example

A freelance graphic designer drives 5,000 miles in a year, with 3,000 miles for business purposes. If the total gas expense is $2,000, they can deduct 60% (3,000/5,000) of the gas expense, which is $1,200, on their Schedule C.

Calculation Required

A calculation is required for this deduction.

To calculate the deductible amount, determine the percentage of business use by dividing business miles by total miles driven. Multiply this percentage by the total gas expenses to find the deductible amount.

Audit Risk & Documentation Tips

Moderate audit risk. Taxpayers should keep a detailed mileage log, including dates, destinations, and purpose of each trip. Retain gas receipts and any other relevant documentation to support the deduction.

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 15, 2025

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