Determining Vehicle Business Use

Malibu Tax Preparation

How does a taxpayer who uses his or her vehicle partly for business determine what portion of the vehicle’s operating expenses can be deducted for business use?  According to tax regulations, business use is determined by the number of miles traveled between two business locations.  The business expense allocation ratio is determined by dividing the business miles for the year by the total vehicle miles for the year.  Keep in mind that commuting expenses to and from your normal place of business are not deductible.  For example, let’s say you put 10,000 miles on the vehicle during the year.  If you drove 6,000 of those miles for business, then 60% of the auto expenses would be treated as deductible business expenses if you are using the actual expense method. 

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