How do I deduct car and vehicle expenses on Schedule C?

If you use your car for business, you can deduct the business-use portion using one of two methods: **Method 1 — Standard Mileage Rate (2025: $0.70/mile):** Multiply your total business miles driven by $0.70. This rate covers all costs: fuel, insurance, depreciation, maintenance. You cannot separately deduct insurance, gas, or repairs if you use this method. **Example:** You drove 8,000 business miles in 2025. Deduction: 8,000 × $0.70 = $5,600. **Method 2 — Actual Expenses:** Track ALL vehicle costs for the year (gas, insurance, registration, repairs, oil changes, depreciation/lease payments), then multiply by your business-use percentage. **Example:** Total vehicle costs $12,000. Business use: 60%. Deduction: $12,000 × 60% = $7,200. **Which method is better?** Depends on your vehicle economics. High-mileage drivers in fuel-efficient cars often benefit from standard mileage. Low-mileage drivers with expensive vehicles often benefit from actual expenses. **Required documentation:** A contemporaneous mileage log is critical — the IRS requires date, destination, miles driven, and business purpose for each trip. Apps like MileIQ, Everlance, or the AnyDayAnyTax app can automate this. **Commuting is NOT deductible:** Miles from home to your regular workplace are commuting — not deductible. Only business-purpose trips qualify. **Reported on Schedule C Line 9**. If using actual expenses, also complete Form 4562 for depreciation.

• Standard mileage rate 2025: $0.70/mile — simplest method
• Actual expenses: total costs × business-use % — better for low-mileage, expensive cars
• Mileage log required: date, destination, miles, business purpose
• Commuting is not deductible — only business-purpose trips
• You must choose your method in the first year you use the vehicle for business