Actual expenses or standard mileage?
A vehicle used for business can be deducted two ways, and the better answer changes with how much you drive and how expensive the car is. This calculator runs both: the actual expense method, where operating costs and depreciation are split by business use percentage, and the standard mileage method, where business miles are multiplied by the IRS rate.
Passenger automobiles also face the Section 280F depreciation cap, which is scaled down by your business use percentage. Depreciation above the scaled cap is not lost but is pushed into later years, which is why a heavily depreciated luxury car often deducts less than the purchase price suggests.
Basis and date — the caps come from 26 U.S.C. sec. 280F and the revenue procedure the IRS issues each year for the placed-in-service year, and the standard mileage rate is republished annually in a separate IRS notice. Both are entered above rather than hard-coded because they change yearly. Content reflects September 2026.
This tool is a general estimate and does not determine your allowable deduction. Bonus depreciation elections, leased vehicle inclusion amounts, heavier vehicles outside the passenger automobile definition and the requirement to keep mileage records all affect the outcome, so review it with a tax professional.
Frequently asked questions
The Section 280F limit applies to the vehicle, so a car used partly for personal driving carries a proportionally smaller cap. Eighty percent business use means eighty percent of the published cap, and depreciation above that is carried into later years.
No. For a given vehicle and year you claim either actual expenses or the standard mileage rate. The standard rate already includes an allowance for depreciation, so you cannot add depreciation on top of it.
Contemporaneous records showing the date, destination, business purpose and miles for each trip, plus total miles for the year. Without them the business use percentage, and therefore the deduction, can be disallowed on examination.