Auto, Trucks, RVs, and More!

Vehicle expenses represent one of the most significant—and most frequently mishandled—deduction opportunities for business owners. Understanding the rules can save thousands in taxes.

Two Methods for Deducting Vehicle Expenses

Standard Mileage Rate: For 2024, 67 cents per business mile. Simple to calculate; multiply business miles by the rate. Must be used the first year the vehicle is available for business to use this method in later years.

Actual Expense Method: Deduct the business-use percentage of all vehicle costs: gas, insurance, repairs, registration, depreciation. Often provides larger deductions for expensive vehicles with high business use.

Heavy Vehicle Advantage

Vehicles over 6,000 pounds gross vehicle weight rating (GVWR) have higher or unlimited depreciation limits. Heavy SUVs can expense up to $28,900 under Section 179 (2024). Vehicles over 14,000 GVWR have no luxury auto limits—full Section 179 and bonus depreciation apply.

Listed Property Rules

Vehicles are "listed property" subject to special rules. If business use falls below 50%, you must use straight-line depreciation. You must maintain logs documenting business vs. personal use.

RVs and Specialty Vehicles

RVs used for business (traveling salespeople, mobile offices) may qualify for deductions if business use is documented and substantial. The key is demonstrating legitimate business purpose and maintaining usage records.

Documentation Requirements

Keep a mileage log showing date, destination, business purpose, and miles for each business trip. Maintain records of all vehicle expenses if using the actual expense method. Document the total miles driven during the year for percentage calculations.