When you use your personal vehicle for business purposes, you have the option to deduct either your actual costs, or the standard mileage rate. In order to use the standard mileage rate, you must use that method the first year you use your vehicle for business. After that, you have the option to switch back and forth between the two methods which allows you to choose the method that provides the most benefit.
The standard mileage rate for the first half of 2022 is 58.5 cents per business mile driven, and 62.5 cents per mile for the second half of 2022. This standard rate includes an allowance for depreciation of your vehicle.
Under the actual expense method, you will still need to track your business mileage for the year in order to split the actual costs between business and personal use. For example, if you spend $1,000 on vehicle maintenance and 25% of the miles driven were business miles, the business deduction for maintenance will be $250. You will be able to include depreciation as a deduction, based on depreciation tables and the percentage of business miles driven.
Please see this Help article for more information: Standard Mileage vs. Actual Expenses: Getting the Biggest Tax Deduction
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