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Is is gas a business expense a valid tax write-off?

TL;DR

Gas can be a valid business expense and deductible if it is used for business purposes. However, it is important to distinguish between personal and business use to ensure proper deduction.

Detailed Answer

Gas expenses are deductible when they are directly related to business activities. For example, if you drive your car to meet clients, deliver goods, or travel between business locations, the gas used for these purposes can be deducted. However, commuting from home to your regular place of business is not deductible. To claim this deduction, you must track the business use of your vehicle and can choose between the actual expense method, which includes gas, or the standard mileage rate, which accounts for gas as part of the rate. The IRS requires that you maintain detailed records of your business mileage, including the date, destination, purpose, and miles driven.

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 total expenses.

Real World Example

A freelance graphic designer drives to meet clients and attend networking events. She tracks her mileage and determines that 60% of her car use is for business. She chooses the actual expense method and deducts 60% of her total gas expenses for the year, which amounts to $600.

Calculation Required

A calculation is required for this deduction.

To calculate the deductible portion of gas expenses, determine the percentage of total vehicle use that is for business. Multiply this percentage by the total gas expenses for the year. Alternatively, use the IRS standard mileage rate, which includes gas.

Audit Risk & Documentation Tips

Moderate audit risk. Maintain a detailed mileage log with dates, destinations, business purposes, and miles driven. Keep receipts for all gas purchases. Consider using a mileage tracking app for accuracy and ease of record-keeping.

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 18, 2025

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