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Standard mileage method versus actual expenses for vehicles

Here’s a bit more about the differences between the standard mileage deduction and actual expenses.

Standard mileage rate

  • You can use this method only if you own or lease your car.
  • The standard mileage rate for 2017 was 53.5 cents per mile; for 2018, it's 54.5 cents per mile.
  • We use this method to calculate your estimated taxes. Be sure you enter trips on the Mileage page or let our mobile app track your trips automatically on your phone.
  • If you're switching from the MileIQ app, you can import the mileage you record there into our web app. (Tip! Be sure to use *our* mobile app to track your mileage automatically on your phone.)
  • Be aware that commute mileage isn’t considered business mileage. So, if you’re a dog-walker and you regularly drive from your home to a client’s home to pick up doggies—that’s considered commute mileage. If you then transport the pups to a dog park and back for exercise—that’s business mileage. (Kinda confusing, we know. The Turbo Tax AnswerXChange or your tax pro can answer any questions you have about this.)

Actual expenses

  • This method requires you to figure out what it actually costs to use your car for business.
  • Whatever you count as an expense must be related to the business miles driven.
  • You can claim expenses such as gas, oil, repairs, tires, and more.
  • Categorize your auto expenses on the Transactions page as Business > Car and Truck > Category. If you use your car for both personal and business use, categorize these costs as Business—no need to split with Personal. TurboTax or your tax pro will calculate the business/personal ratio in your tax return based on the total expense amount.
  • We help you keep track of these expenses so you have them at annual tax time, but we exclude them when calculating quarterly estimated payments and deductions. (Otherwise, we’d be double-counting the deduction.)

For annual taxes, TurboTax or your tax pro can help you figure out which method will be the most advantageous for your situation. One caveat: you can’t switch between methods each year. Our friends at TurboTax have more information about this.

Car expenses and mileage are huge topics, and we can't cover everything here. But you can learn more straight from the source (that is, from the IRS) at this page: Topic 510 - Business Use of Car.

Got tax questions? The Turbo Tax AnswerXChange is a great place to find answers. Read FAQs, ask a question in our community, chat with an agent, or give experts a call.


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