<title>Learn about actual business vehicle expenses</title>
<category>biz</category>
<klink type="cncpt">Tell me about actual business vehicle expenses</klink>
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<content>
<p>Instead of using the standard mileage rate to calculate your business vehicle expenses, you may qualify to use your actual business vehicle expenses. These include your expenses for driving and maintaining the vehicle, such as expenses for gasoline, oil, depreciation, repairs and tune-ups, insurance, tires, licenses, and garage or parking space rental. In addition, you can deduct parking costs and tolls for business purposes. See your accountant for more detailed information and to discuss whether you should use actual business vehicle expenses or the standard mileage rate. You can read more about vehicle expenses in IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses, on the <alink type="xtnl" href="http://www.irs.gov">IRS Web site</alink>.</p>
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<tease>Nondeductible vehicle expenses</tease>
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<p>You cannot deduct traffic fines, penalties, personal or commuting expenses, or parking and garage fees at your place of work.</p>
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<tease>Depreciation and Section 179 expense deductions</tease>
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<p>You can generally deduct depreciation as an expense of driving your vehicle. However, if you use accelerated depreciation or the Section 179 expense deduction for your car, you will not be able to use the standard mileage rate for that vehicle in later years. For more information, see IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses, Chapter 4, on the <alink type="xtnl" href="http://www.irs.gov">IRS Web site</alink>.</p>
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<tease>Deduction for car lease payments</tease>
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<p>You can deduct your cost of leasing a business vehicle. However, if you lease a passenger car for 30 days or more, and the fair market value when you begin leasing it is over certain limits, you may be subject to a special provision called an "inclusion amount," which is added back to your income. This has the effect of limiting the amount of car lease payments you can deduct.</p>
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<tease>Deductible business portion of expenses</tease>
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<p>If you use a vehicle for both personal and business purposes, you must keep track of your mileage to determine the percentage of mileage for business use. Your actual expense deduction is your total vehicle expense for the year multiplied by the percentage of business use.</p>
