In this instructional video, the presenter explains how the IRS permits small‑business owners to deduct vehicle costs in two ways: (1) the actual‑expense method, which allows deduction of gas, tires, oil changes, car washes, insurance, registration, and loan interest, and (2) the standard mileage method, which multiplies business miles driven by the IRS‑published mileage rate (e.g., 56¢ per mile). The presenter emphasizes that regardless of the chosen method, the taxpayer must determine the business‑use percentage by tracking total versus business miles, and must pay all vehicle‑related expenses from a business account. To simplify mileage tracking, a free Excel template is offered in the video description; the presenter demonstrates a simple daily log of odometer readings. The key take‑aways are: calculate the business‑use percentage, choose either actual expenses or mileage deduction, keep thorough mileage records, and ensure vehicle expenses are paid through the business.
Chapters
Can I deduct my car for taxes? And if I can deduct it, how do I actually do that? The IRS has 2 ways in which you are able to write off vehicle use in your business. Either actual expenses— actual expenses will include The gas, if I get new tires, windshield wipers, oil changes, car washes, insurance, vehicle registration, if I have a car loan, the interest on the car loan, all of that would be actual expenses. So I can claim it that way, or the other option they give you is just a simple calculation of a mileage deduction. You take the miles you drove, the business miles you drove, and multiply that by the IRS mileage rate. They change the rate every year, so look it up. But let's say it's 56 cents a mile and I drove 10,000 miles. I'd take 10,000 times it by 56 cents. My write-off would be $5,600. Now when I say both ways, sometimes clients will come and say, well, I don't want to track my own mileage. That sounds like a pain in the butt. So I'm going to take my actual expenses. Unfortunately, the IRS allows you to take the business use percentage of your actual expenses. Just like they let you claim only business miles and not all your miles, they only let you take actual expenses to the extent of the business use percentage. Well, how do you calculate business use percentage? You track mileage. It's your business miles divided by your total miles. So under either scenario, I have to track my miles if I want to write off my vehicle on my tax return. I have to track miles. But what happens, let's say I want to take my mileage deduction on the tax return and not my actual expenses? You still want to pay for your vehicle expenses out of your business account. Okay, so here are 2 things regardless of what option you choose. If you want to take actual expenses or mileage, pay for your vehicle expenses out of your business and track your miles. In the description link, we do have a very simple Excel template we put together. You can print it off and And it'll have the date and, and a dash, an empty space for you to write in the miles you drove for that day. This is how I track my miles, like this legit template that we're giving access to you. Again, it's nothing complicated. I print it off and it lives in my car all year round. So when I get in my car tomorrow, my odometer tells me how many miles I drove today. And in my case, the miles I put on my vehicle are business miles. I only drive my car for business purposes. When I have stuff to do with the family, we drive my wife's car, which fits all of us. So I would get in my car, let's say it says 22.6 miles. On my tracker, I write down 22.6 right next to the date. I reset my odometer. And now the next morning I do the same thing. It takes 10 seconds out of my life each day, and it allows me to have a very accurate mileage tracker. Again, the template is available to you in the description link below, or feel free to reach out to us if you can't find it, and we would be happy to provide that to you. So how do you write off your car for tax purposes? You will take one of the 2 options But you want to pay for vehicle expenses out of the business, you want to track miles. Remember, the IRS sucks.
