Small Business Taxes

Deducting Your Vehicle: Actual Expense vs. Standard Mileage Method

Updated 2025-10-28

Choose between the standard mileage rate and actual‑expense method, understand switching rules, and keep compliant mileage logs.

  1. Choosing a method
  2. Standard mileage method
  3. Actual‑expense method
  4. Mileage logs & substantiation

Choosing a method

The method that yields a larger deduction depends on annual miles, fuel/maintenance costs, and vehicle type. You generally choose a method the first year a vehicle is placed in service.

Standard mileage method

Multiply business miles by the IRS rate for the year. Add parking and tolls. Keep a log showing date, destination, purpose, and miles.

Actual‑expense method

Track fuel, insurance, repairs, lease or depreciation, and allocate by business‑use percentage. Keep all invoices and a mileage log to compute the percentage.

Mileage logs & substantiation

Maintain contemporaneous logs—apps, GPS, or paper—to support your deduction. Reconstructing after year‑end is risky.