Deducting Vehicle Expense

The IRS allows you to to take the greater of actual costs or the standard mileage rate which is 57.5 cents for 2015 for cars driven for business. Commuting is not considered business use per the IRS. I recommend that most business owners use the standard mileage rate since it is so much easier to keep up with if they are using their cars less than 50% for business or think that they may in the future. Once you pick the actual cost method for a car, you can't switch later to the standard mileage rate. The information needed to deduct vehicle expense each year under the standard mileage rate is total miles driven, total business miles, and date vehicle is placed in service. You need to keep some sort of contemporaneous record to track your business miles each year. I use a quickbooks function to keep up with mine. One of my clients just lost their entire deduction for business use of a vehicle because they didn't have any supporting records in a recent IRS audit.