Can I deduct gas and maintenance for my work vehicle?
Yes, gas and maintenance on your work vehicle are deductible. The IRS gives you two ways to claim vehicle expenses, and picking the right one can make a meaningful difference on your tax bill.
The actual expense method lets you deduct gas, oil changes, tires, repairs, insurance, registration, and depreciation based on the percentage of miles driven for business. If you drive 80% for work and 20% personal, you deduct 80% of all those costs. This method tends to work better for contractors running trucks or vans with high fuel and maintenance costs.
The standard mileage rate is simpler. You multiply your total business miles by the IRS rate (67 cents per mile for 2024, 70 cents for 2025) and that’s your deduction. No need to save every gas receipt. But for many trades and construction businesses, the actual expense method produces a larger deduction because trucks are expensive to fuel and maintain.
Either way, you have to track your business miles. The IRS requires a log showing date, destination, business purpose, and miles driven. A mileage tracking app makes this painless. Without a log, the entire deduction is at risk during an audit, no matter how much you actually spent.
If you use one vehicle for both work and personal driving, the business use percentage is what the IRS cares about. Driving to job sites, supply houses, and client meetings counts as business. Your commute from home to a regular office does not, though if you work from a home office, trips from home to job sites typically qualify.
One thing to be aware of is that once you choose the standard mileage rate for a vehicle, you can switch to actual expenses later. But if you start with actual expenses and claim depreciation, you generally cannot switch to the standard mileage rate for that vehicle. So it’s worth thinking through before you file your first return with that vehicle on it. A tax strategy conversation before year-end helps you pick the method that saves more based on your actual numbers.
Vehicles over 6,000 pounds gross vehicle weight (most full-size trucks and vans) also qualify for larger first-year depreciation under Section 179. This can turn a truck purchase into a significant write-off in the year you buy it.
The biggest mistake contractors make is not tracking anything all year and then guessing at tax time. You lose deductions you earned because you can’t back them up. Working with bookkeeping and tax services built for contractors means your vehicle expenses get captured properly throughout the year so nothing falls through the cracks when it’s time to file.
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More Questions
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There are two methods. The simplified method gives you $5 per square foot up to 300 square feet. The regular method applies your business-use percentage to actual home expenses like rent, utilities, and insurance, and usually results in a larger deduction.
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