J.K. Lasser's Small Business Taxes 2017

CHAPTER 9 Car and Truck Expenses

1. Deducting Car Expenses in General
2. Actual Expense Method
3. Standard Mileage Allowance
4. Leasing a Car for Business
5. Arranging Car Ownership
6. Employee Use of an Employer-Provided Car
7. Vehicle Trade-In
8. Trucks and Vans
9. Credit for Plug-In Electric Vehicles
10. Reimbursement Arrangements
11. Recordkeeping for Car Expenses

Americans are highly mobile, and the car is the method of choice for transportation. If you use your car for business, you may write off various costs. The IRS reported that on 2013 returns (the most recent year for statistics), car and truck expenses were the largest category of deductions for sole proprietors (only the cost of goods sold, which is not relevant to service businesses and in any event is not a separate deduction category, was larger). In order to nail down deductions for these expenses, you must carefully observe certain recordkeeping rules. There are 2 methods for deducting costs: the actual expense method and the standard mileage allowance. In order to use either method, you must maintain proper records for business driving.

For further information about deductions with respect to business use of your car, see IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses.

Deducting Car Expenses in General

The discussion in this chapter applies to cars used partly or entirely for business.

Car Any 4-wheel vehicle made primarily for use on public streets, roads, and highways that has an unloaded gross vehicle weight of ...