Can I Write Off My Car as a Business Expense?

Can I Write Off My Car as a Business Expense? A 2025 Guide for Small Business Owners

If you use your car for work, you might be leaving money on the table by not writing off vehicle expenses. But here’s the catch: not all driving qualifies, and how you track it makes all the difference.

This guide breaks down exactly how car write-offs work and how to make sure you’re doing it right in 2025.

1. Can You Write Off Your Car for Business?

Yes, but only the portion used for business purposes. If you’re a realtor, contractor, consultant, or freelancer who drives for client meetings, errands, or job sites, you can likely deduct part of your car expenses.

Commuting from home to an office? That’s not deductible. But driving to a client? That is.

2. Two Ways to Deduct Car Expenses

You get to choose one of two methods:

A. Standard Mileage Rate (Easy Option)

• Track your business miles

• Multiply by the IRS rate (for 2025, it’s projected around 70 cents/mile*)

• That’s your deduction

Example:
If you drove 4,000 business miles → 4,000 x $0.70 = $2,800 deduction

B. Actual Expense Method (More Work, Bigger Deduction?)

• Track all actual costs: gas, repairs, insurance, lease, depreciation, etc.

• Deduct the business-use portion (e.g., 70% of total expenses if 70% of your driving is for work)

3. What Counts as Business Use?

• Driving to meet clients

• Delivering goods or services

• Picking up supplies

• Business errands (bank, post office)

• Site visits

🚫 Doesn’t count: Daily commute, personal trips, or driving to your regular office.

4. What You Need to Track

• Mileage log (apps like MileIQ or QuickBooks Self-Employed work great)

• Receipts for gas, repairs, and insurance (if using actual expense method)

• Start & end mileage for the year

5. Common Mistakes to Avoid

• Mixing business and personal trips without logs

• Trying to write off 100% of a car used for both work & personal

• Not keeping records: this is audit bait

6. Final Tip: Don’t Guess. Track Everything

Most business owners either under-deduct or risk over-deducting and getting flagged. That’s where a bookkeeper can save you: clean records, real savings, less stress.

Need help organizing your business expenses, vehicle included?
Reach out and we’ll help you stop guessing and start keeping what’s yours.