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Is is gas tax deductible a business expense?

TL;DR

Gas expenses can be deductible as a business expense if they are directly related to business use of a vehicle. However, personal use of a vehicle is not deductible.

Detailed Answer

Gas expenses are deductible when they are incurred for business purposes. This means the vehicle must be used for business activities, such as meeting clients or traveling to job sites. Personal use of the vehicle, such as commuting from home to a regular place of business, is not deductible. Business owners can choose to deduct actual expenses, including gas, or use the standard mileage rate. When using actual expenses, you must keep detailed records of all expenses and the business use percentage of the vehicle. For example, if a vehicle is used 70% for business, then 70% of the gas expenses can be deducted. It's important to distinguish between commuting and business travel to ensure compliance.

Where to Put It on the Tax Form

Schedule C, Line 9 (Car and truck expenses) or Form 2106 for employees if applicable.

Real World Example

A freelance photographer uses their car to travel to various photoshoot locations. They track their mileage and gas expenses, determining that 80% of their vehicle use is for business. They can deduct 80% of their gas expenses on Schedule C.

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 purposes. Multiply the total gas expenses by this percentage to find the deductible amount.

Audit Risk & Documentation Tips

Moderate. Keep detailed mileage logs, receipts for gas purchases, and records showing the business purpose of each trip. Use apps or a mileage logbook to track business miles accurately. This documentation will help substantiate the deduction in case of an audit.

IRS Reference

IRS Publication 463

Relevant Industries

FreelancersReal Estate AgentsConsultantsSales 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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