Vehicle expenses may be taken:
- As a standard mileage rate, or
- As actual expenses which includes a depreciation component.
You are not able to claim both.
There are two ways to deduct your business-related vehicle costs: Actual expenses or the standard mileage deduction. You select which method you want to use at the screen Do you want to take the standard mileage deduction for this vehicle?
Most people use the standard mileage method because it simplifies your recordkeeping. There's no need to keep gas receipts, repair bills, etc. Instead, you total your business miles for the year and apply the IRS mileage rate.
The actual expenses method requires you to add up all the money actually spent in the operation of your vehicle. TurboTax will take your total vehicle expenses and multiply them by the percentage of the vehicle’s business use to get the amount of your deduction.
Some of the costs you can include in your Actual Expenses are:
- Lease payments
- Auto insurance
- Gasoline
- Maintenance (such as oil changes, brake pad replacements, tire rotations)
- New tire purchases
- Title, licensing, and registration fees (not deductible in all states; we will check to see if this expense is deductible in your state)
- Vehicle depreciation
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