Auto Expenses

If you use your car for business purposes, you may be able to deduct car expenses. You generally can use one of two methods to figure your expenses: Actual Expenses or the Standard Mileage Rate.

Actual Expenses

Deductible Items — If you choose to deduct actual expenses you can deduct the cost of the following items:

  • Depreciation
  • Lease Fees
  • Rental fees
  • Garage rent
  • Licenses
  • Repairs
  • Gas
  • Oil
  • Tires
  • Insurance
  • Parking fees
  • Tolls

Business and Personal Use — If you use your car for both business and personal purposes, you must divide your expenses between business and personal use.

Example: You are a contractor and drive your car 20,000 miles during the year: 12,000 miles for business use and 8,000 miles for personal use. You can claim only 60% (12,000 / 20,000) of the cost of operating your car as a business expense.

Standard Mileage Rate

Instead of figuring actual expenses, you may be able to use the standard mileage rate to figure the deductible cost of operating your car, van, pickup, or panel truck for business purposes. You can use the standard mileage rate only for a car that you own. The rates are adjusted periodically for inflation.

If you choose to take the standard mileage rate, you cannot deduct actual operating expenses. These include depreciation, maintenance and repairs, gasoline (including gasoline taxes), oil, insurance, and vehicle registration fees.

Mileage Rates (cents per mile)

Year Business Medical Charitable
2012 55.5 23 14
2013 56.5 24 14
2014 56 23.5 14
2015 TBD TBD 14

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