CHAPTER 9Car and Truck Expenses
Americans are highly mobile, with 286.9 million vehicles registered in the U.S. in 2020, according to automotive research agency Hedges & Company. Businesses and self-employed individuals may write off various costs. For 2018 through 2025, employees who use their personal vehicles for business driving cannot deduct driving costs. The IRS reported that on 2018 returns (the most recent year for statistics), car and truck expenses were a significant category of deductions on Schedule C (Form 1040) for sole proprietors (only salaries and wages 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, Gift, and Car Expenses.
Deducting Car and Truck Expenses in General
The discussion in this chapter usually refers to cars used partly or entirely for business. For 2021, the same rules ...
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