If you drive for work — to job sites, client meetings, or hauling equipment — your vehicle is one of your biggest potential deductions. The question is how to claim it: the standard mileage rate or actual expenses. For trades, trucking, and service businesses, picking the right method can mean a meaningfully bigger write-off.
What are the two ways to deduct a business vehicle?
You can deduct your vehicle using either the standard mileage rate or the actual expense method — but not both for the same costs. In short:
- Standard mileage: you multiply your business miles by the IRS rate for the year. Simple, and it rolls most vehicle costs into one number.
- Actual expenses: you deduct the business-use percentage of what the vehicle actually costs you — fuel, insurance, repairs, tires, registration, lease payments, and depreciation.
The IRS sets a standard mileage rate each year, so always use the current year's rate when you calculate. Either way, you need a mileage log to prove your business use.
Which method gives the bigger deduction?
Actual expenses usually win for expensive-to-operate vehicles; standard mileage often wins for efficient, high-mileage ones. If you drive a heavy work truck that burns fuel, needs frequent repairs, and carries real insurance costs, the actual expense method tends to capture more. If you put a lot of miles on a reasonably economical vehicle, the standard mileage rate can come out ahead and is far less work. The only way to know for certain is to run both — which is easy if you track both your miles and your costs during the year.
Can I write off a truck or heavy vehicle in 2026?
Often yes — and sometimes a large portion in the first year. Heavier work vehicles used primarily for business can qualify for first-year expensing under Section 179 and bonus depreciation, which were enhanced under the 2025 tax law. That can make a qualifying truck or van a significant deduction the year you place it in service. The rules depend on the vehicle's weight, how it is used, and the business-use percentage, so this is an area where a quick conversation before you buy pays off. Our Tax & Compliance team helps owners structure vehicle purchases for the best result.
What records do I need to deduct my vehicle?
You need a mileage log and, for the actual method, receipts for your vehicle costs. The mileage log is non-negotiable under either method — the IRS expects a record of your business miles, the dates, and the purpose. A phone app that tracks trips automatically makes this painless. For the actual method, keep receipts and statements for fuel, repairs, insurance, and the rest. Good records are what turn a vehicle deduction from a guess into a defensible number.
Can I switch methods later?
Sometimes, but there are rules, so choose carefully in year one. If you want the option to use actual expenses later, there are restrictions tied to how you started — particularly if you lease, or if you took certain depreciation. Because the first-year choice can lock in your options, it is smart to decide deliberately rather than by default. Tracking both miles and costs from day one keeps the choice open as long as possible.
Can I deduct a vehicle I also use personally?
Yes, but only the business-use portion — and that is why your mileage log matters so much. Very few work vehicles are used 100% for business, and the IRS expects you to deduct only the business share. If you drive 15,000 business miles out of 20,000 total, roughly 75% of the vehicle's costs (or 75% of your mileage) is deductible. Commuting from home to a regular workplace generally does not count as business miles, though travel between job sites usually does. The cleanest way to handle a mixed-use vehicle is to track every business trip as it happens, so your business-use percentage is a documented fact rather than a year-end estimate.
If your vehicle is a major part of how you do business, it is worth making sure you are deducting it the smart way. We are happy to help you compare.