You may deduct business mileage visiting clients, and not commuting miles. You may claim deductible business auto/truck expenses in one of two ways.
- IRS Mileage Rate: You can claim business miles times the IRS mileage rate. IRS mileage rates for business activities are $53.5 (cents per mile) for 2017. You can add parking and tolls to the mileage rate.
- Actual Cost: You can claim your actual costs including depreciation times the percentage that you use your car for business. Actual costs would include gas, oil, insurance, repairs, etc. Payments on a note would not be deductible. The cost of the vehicle would be deducted through depreciation instead (or lease deducting lease payments if you lease it.)
Where to Deduct:
- If you are an employee, they are a miscellaneous itemized deduction. Miscellaneous itemized deductions are only available if you qualify to itemize and only to the extent that they exceed 2% of your Adjusted Gross Income. Example: If your Adjusted Gross Income is $50,000, only miscellaneous itemized deductions over $1,000 are deductible. Because of this, many items deductible as miscellaneous itemized deductions have no tax value because the taxpayer doesn't itemize, or because they are lost in the 2% of adjusted gross income limitation.
- If you are self-employed, these expenses would be business expenses on Schedule C.
