Deduct my car monthly payments, also payed extra for full service contract

[Phillip1 · Accepted solution]

Monthly payments can only be fully deducted (in some cases) if the car is being leased. You can deduct the interest on car loans and depreciate the purchase price of the vehicle.

Business vehicles are either deducted using the standard mileage rate or the business use percentage of actual vehicle expenses.

The standard mileage rate requires only that you track your business mileage and total mileage for the year.

In order to deduct actual expenses like interest, depreciation, lease payments, fuel, repairs, maintenance, and other expenses, you must keep track of the business and total mileage on your car. This is necessary to correctly calculate the business use percentage on the vehicle.