Yes. You deduct the business portion of your vehicle expenses on Schedule C, and there are two ways to do it. The car sitting in your driveway right now, half personal and half work? Those business miles are worth money at tax time if you track them.
The two paths
The IRS gives you two methods: the standard mileage rate and the actual expense method. You pick one per vehicle per year, and the choice matters more than most people realize.
Standard mileage rate is the simple one. You track your business miles, multiply by the IRS rate, and that's your deduction. For 2025, the rate is 70 cents per mile. For 2026, it's 72.5 cents for the first half of the year and 76 cents for the second half. That rate covers everything: gas, maintenance, insurance, registration, depreciation. You don't add those up separately.
Say you're a wedding photographer in Savannah who drove 4,000 business miles in 2025. That's $2,800 in deductions. You drove to engagement sessions, to the print lab, to a venue walkthrough. All of that counts. The miles from your house to the grocery store don't.
Actual expense method is the detailed one. You add up everything the car cost to operate for the year: gas, oil, repairs, tires, insurance, registration fees, depreciation or lease payments. Then you multiply that total by your business-use percentage. If your total vehicle costs were $6,000 and you drove 60% for business, your deduction is $3,600.
Here's the thing that trips people up. If you own the car and want to use the standard mileage rate, you have to choose it in the first year the car is available for business use. After that first year, you can switch between methods in later years. If you start with actual expenses in year one, you're locked out of the standard mileage rate for that car forever.
If you lease the car, the rules are stricter. Choose the standard mileage rate for a leased car, and you must stick with it for the entire lease period, including renewals.
The method you choose in year one for a car you own is the only method you can never go back to.
What counts as business miles
This is where good records separate a real deduction from a disallowed one. The IRS wants a log. Not estimates. Not "I drove about 8,000 miles this year." A log.
Business miles include driving to:
- A client's office or job site
- The bank for a business transaction
- A supplier or store for business supplies
- Your accountant or lawyer for business matters
What's not deductible? Your commute. Driving from home to your regular workplace is personal, no matter what you do along the way. If you're an electrician who drives from home to the same job site every day for three months, that's commuting. If you drive from your shop to a job site, that's business. The starting point matters.
Here's a concrete one. You're a food-truck owner parked at home overnight. You drive from home to Forsyth Park to serve lunch, then home. The trip to the park and back is business. Now you stop at Sam's Club on the way home for supplies. The miles from the food truck to Sam's Club are business. The miles from Sam's Club to your house are personal.
You're a barber with a chair at a shop on Broughton Street. You drive there every day. That's a commute. But if you drive from the shop to a beauty supply warehouse to pick up clippers and product, those miles are deductible.
Parking and tolls: the bonus deduction
Both methods let you deduct parking fees and tolls for business trips separately, on top of whatever method you're using. People miss this one. You take the standard mileage rate and you paid $12 to park at a client meeting in downtown Savannah? That $12 is a separate deduction. Keep the receipt.
What goes wrong
Let's talk about the dollar-shaped cost of getting this wrong.
The most common mistake is guessing. You show up at tax time with a mileage estimate, no log, no receipts. If you get audited, the IRS disallows the entire vehicle deduction. For a self-employed person who drove 10,000 business miles at 70 cents per mile, that's $7,000 of income suddenly taxable. At a 25% effective rate, you owe $1,750 in tax plus penalties and interest.
The second mistake is picking the wrong method in year one. You buy a truck for your landscaping business, use actual expenses in year one because you had a big repair bill, then realize the standard mileage rate would have given you a bigger deduction over the life of the car. Too late. You're stuck with actual expenses for the life of that vehicle.
The third mistake is mixing personal and business without tracking the split. You can't deduct 100% of a car you drive 40% for business. The business-use percentage has to be real, supported by your mileage log.
This is the kind of judgment call where getting it wrong costs real money. Figuring out which method gives you the better deduction, especially when depreciation and Section 179 come into play, is work Nomadica does for clients. We run both numbers and show you which one wins before you commit.
Section 179 and the first-year write-off
Here's where vehicles get interesting. If you buy a car for business use, you might be able to write off a chunk of the purchase price in the first year through Section 179, bonus depreciation, or regular depreciation.
Section 179 lets you deduct the business portion of the vehicle's cost in the year you place it in service. To qualify, you must use the vehicle more than 50% for business, and you take the deduction in the year you buy and start using it.
Say a food-truck owner buys a used cargo van for $25,000 and uses it 80% for business. The Section 179 deduction would be $20,000 ($25,000 times 0.80). That's a serious first-year deduction.
But there are limits. The IRS caps depreciation on passenger cars because Congress decided taxpayers shouldn't subsidize extravagant vehicles. For new and pre-owned vehicles placed in service in 2025 and used 100% for business, the maximum first-year depreciation write-off is $12,200, plus up to $8,000 in bonus depreciation. For SUVs with loaded weights over 6,000 pounds but no more than 14,000 pounds, 60% of the cost can be expensed using bonus depreciation in 2025.
The catch: if you take Section 179 or bonus depreciation, you can never use the standard mileage rate for that car. You're in the actual expense method for good. And if your business use drops below 50% in a later year, you may have to report income to recapture the deduction. That's a real trap.
If you bought the car for personal use first and later started using it for business, you don't qualify for Section 179. The car has to be purchased for business use.
Can you write off car payments?
In most cases, no. You can't deduct the principal portion of your car payment. But you can deduct the interest portion of the loan if the car is used for business. If you're financing a car you use 70% for business, roughly 70% of the interest you pay each year is deductible.
If you're leasing, it's different. You can deduct the business portion of your lease payments under the actual expense method.
The recordkeeping that actually saves you
The IRS requires you to substantiate your expenses with adequate records. For mileage, that means a log showing the date, business purpose, destination, and miles driven for each business trip. For actual expenses, keep receipts for gas, repairs, insurance, registration.
At minimum, record your odometer reading on January 1 and December 31 of each year. That gives you total miles. Your business miles from your log divided by total miles gives you your business-use percentage. That percentage is the backbone of the actual expense method.
A tracking app works. A notebook in the glove box works. A spreadsheet updated weekly works. What doesn't work is reconstructing a year of mileage from memory in March.
One last thing about switching
If you use the standard mileage rate in year one for a car you own and switch to actual expenses in a later year, you have to use straight-line depreciation for the remaining life of the car. You can't use the accelerated depreciation methods that would normally give you a bigger write-off. This is the trade-off the IRS built into the flexibility.
For leased cars, there's no switching at all. Standard mileage rate means standard mileage rate for the full lease.
Where this lands
Your car is one of the most audit-prone deductions on a Schedule C. The IRS knows people overstate business miles and undercount personal use. The deduction is real and worth claiming, but it wants honest records and a method choice that fits how you actually use the vehicle.
If you want someone to run both methods against your actual numbers and tell you which one wins before you file, that's a conversation worth having. Send us your mileage log and we'll do the math.