{"id":11472,"date":"2026-07-27T13:00:32","date_gmt":"2026-07-27T18:00:32","guid":{"rendered":"https:\/\/www.cainwatters.com\/digitalblogs\/?p=11472"},"modified":"2026-09-16T12:36:10","modified_gmt":"2026-09-16T17:36:10","slug":"tax-deduct-car-to-business","status":"publish","type":"post","link":"https:\/\/www.cainwatters.com\/digitalblogs\/tax-deduct-car-to-business\/","title":{"rendered":"IRS Announces Mid-Year Standard Mileage Rate Increase"},"content":{"rendered":"\t\t
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The Dos and Don'ts of Deducting Your Personal Vehicle for Business Use <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The IRS recently announced a mid-year increase to the standard mileage rate for business use of a personal vehicle, a relatively uncommon move that reflects rising gas prices.<\/p>

For 2026, taxpayers should apply a split-year mileage rate. For miles driven Jan. 1 through June 30, 2026, the rate is 72.5 cents per business mile. For miles driven July 1 through Dec. 31, 2026, taxpayers can deduct 76 cents per business mile.<\/p>

A higher mileage rate means a bigger deduction for every qualifying business mile driven, but the rate itself is only part of the story. The standard mileage rate is optional, and taxpayers may instead choose to calculate and deduct actual vehicle expenses if that method produces a better result and is properly substantiated.<\/p>

\u201cIf you use your personal vehicle for business purposes, understanding how vehicle-related tax deductions work can help you capture savings that might otherwise be left on the table,\u201d says Tax Director J.J. Anderson<\/span><\/a>.\u00a0<\/p>

TAX DEDUCTIONS FOR THE BUSINESS USE OF YOUR VEHICLE<\/strong><\/h5>

Your vehicle must be used for business purposes to qualify for deductions.<\/p>

Business purposes may include travel from one workplace to another, trips to supply stores, satellite locations, the bank or trips to business meetings away from your regular workplace. It does not include commuting from your home to your regular office.<\/p>

Additionally, if you use the car for both business and personal purposes, you may only deduct the portion that is for business use.<\/p>

TYPES OF DEDUCTIONS<\/strong><\/h5>

There are two common ways to calculate a business vehicle deduction: the standard mileage rate or actual expenses.<\/p>

Standard mileage rate:<\/strong> For 2026, use 72.5 cents per mile for qualifying business miles driven Jan. 1 through June 30 and 76 cents per mile for qualifying business miles driven July 1 through Dec. 31.<\/p>

Actual expenses:<\/strong> If you use your vehicle for business purposes, you may deduct the business-use percentage of the cost of ownership and operation, such as insurance, gas, maintenance, repairs and depreciation, when properly substantiated. Ownership and operation generally should be paid through the business when the business is claiming the deduction.<\/p>

The better method depends on the facts, including business-use percentage, total miles driven, vehicle cost, operating costs, depreciation limitations and how long you expect to keep the vehicle. Taxpayers generally cannot claim both the purchase-price\/depreciation deductions and the standard mileage deduction for the same vehicle in the same year.<\/p>

Depreciation<\/strong><\/p>

There are three methods that may apply when depreciating a business vehicle: Section 179 expensing, bonus depreciation, and MACRS depreciation. Depending on the facts and elections made, you may use one, two, or all three methods in the year the vehicle is placed in service.<\/p>