Actual Auto Expenses

If you use a vehicle for business you may be eligible to deduct your auto expenses. While many opt to take the standard mileage deduction, you also may have the option to deduct your actual vehicle expenses. To use the actual expense method, keep track of what you spend during the year to operate your vehicle, including gas, tires, insurance, license, registration and repairs, to name a few, and then deduct the portion attributable to your business driving. The actual method will require more record keeping than the standard mileage deduction, but it may be worth it -- you may could come out ahead at the end of the year. Apps like Hurdlr make it easy to track your expenses as they occur. Since Hurdlr is integrated with your smartphone's camera, you can simply take pictures of your receipts, and your record will be created instantly. Refer to our diagrams below to find out if the actual vehicle expense deduction is right for you.


Speedy Wheeler, a Washington, D.C. based driver for Lyft tracked his vehicle expenses last year and found that he spend $6,000 on gas, insurance, maintenance and repairs. Speedy can attribute 50% of his miles (4,000) to driving for Lyft, so his total deduction using the actual method would be $3,000. The same 4,000 business miles at the standard $0.545 per mile rate would only be a $2,180 deduction. Since Speedy kept good records, naturally, he rewarded himself and opted to take the actual expense deduction.


Number Cruncher, CPA is a sole proprietor accountant who loves keeping up on the latest IRS rulings. Number Cruncher realized he could deduct a substantial portion of the cost of his new vehicle by taking a section 179 Deduction. When tax time rolled around, he was required to use the actual method to deduct his business vehicle expenses because he chose to take the Section 179 deduction.


When a serious Airbnb host told her accountant she wanted to deduct her Airbnb vehicle expenses, her accountant was skeptical. That is until she sent him her Hurdlr mileage and vehicle expense reports, which substantiated that she drove almost 2,000 miles (5% of her total miles) for her Airbnb activities last year and spent $10,000 operating her vehicle. Because she had the right supporting data, she was able to deduct $500 ($10,000 X 5%) of actual vehicle expenses on line 6 of her Schedule E.


Luke has always been an entrepreneur so purchasing a fleet of eight vehicles to “lease” to uber drivers was a no brainer. To maximize his profits, Luke makes sure to always have six vehicles on the road at any given time. Because he operates more than five vehicles at the same time, he is required to calculate his businesses vehicle expenses based on actual costs.


Rachel is a solo-photographer who is typically either at home, on location at a shoot, or editing her photos at a coworking space she has a dedicated desk at. If Rachel drives from her home or her office directly to a shoot she would be able to consider those as business miles. On the other hand, if Rachel drives from her home to her co-working space to edit some photos those miles would be off the table. At the end of the year Rachel will tally up all of her qualifying business miles and deduct the portion of her actual auto expenses related to those miles.


  • If you lease your vehicle you may include the portion of your lease payment attributable to your business driving as an actual expense. Drivers who own their vehicles may not include note payments as a part of actual expenses, rather, they will take a separate depreciation deduction.
  • If you used the actual expense method the first year you placed your car in service, you cannot switch to the standard mileage deduction.
  • Tickets and fines are not eligible for tax deduction in any circumstance.
  • To deduct your actual business vehicle expenses you'll need to know your total miles driven for the year, your total business miles driven, how much you paid for your car, what date you placed your car into service and the total dollar amount you spent on vehicle expenses during the year.
  • Know your limits: If you are deducting actual vehicle expenses, you can count trips from your home or your office to a temporary work-site or business meeting. However, the miles you drive getting from your home to your office are off the table. See our diagram to help you determine if your trips count. Further, outside of disallowed trips, there are a few other circumstances that can prohibit you from deducting actual vehicle expenses. Refer to our diagrams to help determine what you may be allowed to deduct

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