Business Vehicle Deduction Calculator
Driving for business? The IRS gives you three ways to deduct vehicle expenses. This calculator compares all three methods side-by-side so you can pick the one that saves you the most.
1,800+
Vehicle Deductions
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Avg. Deduction
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Vehicle Deduction Calculator
3-way comparison: Mileage vs Actual vs Section 179
Annual Mileage
Commute miles are never deductible
Annual Vehicle Expenses(for Actual Expense method)
Best Method
Actual Expense
Year 1
$11,475
Business Use
75%
Disclaimer: This calculator provides estimates for educational purposes only. Vehicle deduction rules are complex and depend on your specific situation, including when you placed the vehicle in service and prior depreciation claimed. Consult with a qualified CPA for personalized advice.
Understanding Business Vehicle Deductions
If you use a vehicle for business, you can deduct related expenses on your tax return. The IRS offers three methods, each with different rules and benefits. Choosing the right one can mean thousands of dollars in additional deductions.
Method 1: Standard Mileage Rate
The simplest approach — multiply your business miles by the IRS standard rate ($0.70/mile for 2025). This rate covers gas, depreciation, insurance, and maintenance in one number.
- No need to track actual expenses
- Just log your business miles
- Must use this method from year one to keep the option
- Best for vehicles with lower operating costs
Method 2: Actual Expense Method
Track every vehicle expense (gas, insurance, repairs, depreciation) and deduct the business-use percentage. This method often wins for expensive vehicles with high business use.
- Requires detailed expense records
- Includes MACRS depreciation on the vehicle
- Light vehicles subject to luxury auto caps (IRC Section 280F)
- Better for high-mileage, high-expense scenarios
Method 3: Section 179 Expensing
Deduct the cost of a business vehicle in the first year instead of depreciating it over time. The big benefit: vehicles over 6,000 lbs GVWR qualify for up to $31,300 in immediate deductions for 2025.
- Must have over 50% business use
- Heavy vehicles (>6,000 lbs) get significantly higher limits
- Light vehicles limited to $12,200 in 2025
- Best for new vehicle purchases with high business use
The 6,000-Pound Rule
Vehicles with a GVWR exceeding 6,000 pounds are exempt from the luxury auto depreciation caps. This means full-size SUVs, trucks, and vans can qualify for much larger first-year deductions. Common qualifying vehicles include the Ford F-150, Chevy Tahoe, GMC Yukon, and Toyota Land Cruiser.
Commute Miles Are Never Deductible
The IRS never allows deductions for commuting — driving from your home to your regular workplace. However, if you have a qualifying home office, trips from home to any business location become deductible business miles.
Frequently Asked Questions
What is the standard mileage rate for 2025?
The IRS standard mileage rate for 2025 is $0.70 per business mile (IRS Notice 2025-5). This rate covers gas, depreciation, insurance, and maintenance. You simply multiply your business miles by this rate -- no need to track actual expenses.
When should I use actual expenses instead of standard mileage?
Actual expenses tend to win when you have an expensive vehicle with high operating costs or high business-use percentage. The standard mileage method is simpler and often better for less expensive vehicles. This calculator compares both methods so you can choose the best one.
What is the 6,000-pound SUV rule?
Vehicles with a Gross Vehicle Weight Rating (GVWR) over 6,000 pounds qualify for enhanced Section 179 deductions -- up to $31,300 in 2025 (vs $12,200 for lighter vehicles). This benefits owners of full-size SUVs, trucks, and vans used primarily for business. Common qualifying vehicles include Ford F-150, Chevy Tahoe, and Toyota Land Cruiser.
Can I deduct my commute to work?
No. Commuting from home to your regular workplace is never deductible, regardless of the distance. However, trips from your office to client sites, a second business location, or temporary work sites ARE deductible. If you have a qualifying home office, trips from home to any work location become deductible business miles.
What are the luxury auto depreciation limits?
For passenger vehicles (under 6,000 lbs GVWR), the IRS caps annual depreciation deductions regardless of the vehicle's actual cost. For 2025 (Rev. Proc. 2025-16): $12,200 (year 1), $19,600 (year 2), $11,800 (year 3), and $7,060 (each succeeding year). With bonus depreciation, the year 1 limit increases to $20,200.
Need help choosing the right vehicle deduction method?
Vehicle deduction rules are tricky — especially when switching methods, dealing with luxury auto caps, or buying a new vehicle mid-year. Book a free consultation to make sure you're maximizing your deduction.
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