Track Vehicle Mileage Deductions
Vehicle mileage is one of the most commonly overlooked deductions for freelancers and LLC owners. This recipe walks you through choosing the right deduction method and recording your business miles to reduce your taxable income on Schedule C Line 9.
1. Choose your method
The IRS allows two approaches to deduct vehicle expenses: the standard mileage rate (a fixed amount per mile) or actual expenses (gas, maintenance, depreciation). Understanding the difference helps you select the method that saves you the most money. Your choice depends on your driving habits and vehicle expenses.
2. Enter your business miles
Once you've chosen your method, you'll need to total all the miles you drove for business purposes during the year. This includes client meetings, supply runs, and other work-related travel—but not your commute. Keep supporting documentation like mileage logs or trip records in case of an audit.
3. Check your total
Verify your calculation to ensure your vehicle deduction is accurate and properly reflected on your tax return. This final check catches any errors before you file and confirms the amount that will reduce your taxable income.