Paying Taxes Guide

There are two ways that you can deduct your expenses related to your car: the standard mileage method or the actual expense method. Most go with the standard mileage method because it is easier to do (you simply take a specific per mile deduction based on the miles driven.) Yet, you can deduct more if you go the other route.

With the actual expense method, you deduct the actual costs you incur over the year to keep your car operational such as gas costs, repairs, licensing, etc. Even things like your tolls and car washing are deductible. The problem is, you must keep track of all of these expenses if you wish to write them off. You must calculate these things based on how much time you have spent using your car for business needs if it is shared for personal needs. And, if you had specific deductions in the years prior, then you may not be able to use this method.