Question

I have a question about self-employed tax deductions. What self-employed vehicle expenses am I eligible to deduct?

Answer

To deduct vehicle expenses, you can use standard mileage or actual expenses. For either method, keep a log of the miles you drive for your business. Both methods allow self-employed tax deductions for tolls and parking fees.

If you use the standard mileage rate, you can only deduct the mileage at a standard rate. For 2018, the rate is $0.545. You cannot deduct self-employed vehicle expenses, including:

  • Actual vehicle expenses
  • Depreciation
  • Lease payments
  • Maintenance
  • Repairs
  • Gasoline
  • Oil
  • Insurance
  • Vehicle registration fees

If you use actual vehicle expenses, you can’t deduct mileage. Instead, you can deduct:

  • Depreciation
  • Licenses
  • Lease payments
  • Registration fees
  • Gas
  • Oil
  • Insurance
  • Repairs
  • Tires
  • Garage rental

If you use your car for both business and personal use, you must prorate your expenses. To learn more about self-employed vehicle expenses, see Publication 463: Travel, Entertainment, Gift, and Car Expenses at www.irs.gov.

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