No, you can't deduct all the mileage.
Even though you might be tempted to argue that an advertisement makes every trip into a business trip, tax law will not be on your side. In 2010, the Internal Revenue Service took a dental practice to court when the full use of the car was reported as a qualifier for a deduction because of an advertisement. It was determined that the dental practice was not allowed to deduct 100 percent of the car expenses simply because of vehicle advertising.
The cost of adding advertising to your vehicle is tax deductible. For example, if you spend $1,000 hiring someone to paint your logo on your car, you can deduct the full $1,000 as a business expense.
- Commuting to work is not deductible, but business trips and use of your vehicle to transport your business materials count.
- Track your business use of the vehicle in mileage to determine what percentage of your use is business-related. Compile your vehicle expenses for the year, including maintenance. Multiply that amount by the percentage of business use, and that will determine what you are able to deduct.
If you are self-employed
(Schedule C), enter/edit your vehicle's mileage:
- Type vehicle expenses, self-employed
business in the search/find box and click search.
- Click on Jump to vehicle
expenses, self-employed business.
- Edit your business.
- At the 'Your xxxx Business' screen,
scroll down to Business Expenses.
- Click start/update next to Business
Vehicle Expense.
- Continue with the onscreen interview until you
get to the 'How Do You Want to Enter Your Mileage for your vehicle'.
See the screenshot below.
