J.K. Lasser's Your Income Tax 2017

Chapter 43 Deducting Car and Truck Expenses

1. 43.1 Standard Mileage Rate
2. 43.2 Expense Allocations
3. 43.3 Depreciation Restrictions on Cars, Trucks, and Vans
4. 43.4 Annual Ceilings on Depreciation
5. 43.5 MACRS Rates for Cars, Trucks, and Vans
6. 43.6 Straight-Line Method
7. 43.7 Depreciation for Year Vehicle Is Disposed of
8. 43.8 Depreciation After Recovery Period Ends
9. 43.9 Trade-in of Business Vehicle
10. 43.10 Recapture of Deductions on Business Car, Truck, or Van
11. 43.11 Keeping Records of Business Use
12. 43.12 Leased Business Vehicles: Deductions and Income

The costs of buying and operating a car, truck, or van for business are deductible under rules hedged with restrictions. Depreciation deductions for most cars, trucks, and vans are subject to annual ceilings. For new cars placed in service in 2016 that are used over 50% for business, the first-year depreciation limit is $11,160 (43.4). For most new light trucks and vans, the 2016 limit is $11,560 (43.4). The annual limits are reduced for personal use. If a vehicle placed in service in 2016 is used 50% or less for business, depreciation must be based on the straight-line method and the maximum deduction is reduced by personal use (43.4).

To avoid accounting for actual vehicle expenses and depreciation, you may claim an IRS mileage allowance. The allowance for 2016 is 54 cents per mile. Keep a record of business trip mileage.

If you are self-employed, you deduct your vehicle expenses on Schedule C or Schedule C-EZ if eligible (40.6). Use ...