Deducting the Standard Mileage Rate vs. Actual Expenses for Business-Use Vehicles

Tax Law and News tax matters for self-employed people

The standard mileage rate for business related travel is based on an annual study of fixed and variable costs of operating a vehicle, including depreciation, insurance, repairs, tires, maintenance, gas and oil. Taxpayers have the option of claiming deductions based on actual costs of operating the car versus the standard mileage rate.

  • A taxpayer may not use the standard mileage rate for a car after claiming accelerated depreciation, including Section 179 expense for that car.
  • The standard mileage rate is not available to fleet owners (more than four vehicles used simultaneously).

If you claim the standard mileage rate instead of the actual expenses, you can also deduct parking fees and tolls. If you claim actual expenses, you can claim a depreciation deduction, unless you lease your car. If you claim any deduction for the business use of a car, you must provide information about the use of the car, such as date placed in service, mileage (total, business, commuting and other personal mileage), after-work use, use of other vehicles, whether you have evidence to support the deduction and and whether the evidence is written.

Beginning on Jan. 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:

  • 54 cents per mile for business
  • 19 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations
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