Are You Eligible for Deduction of Vehicle Expenses?

If you use your car for business purposes, you may be able to deduct car expenses. You generally can use one of two methods to figure your expenses: actual expenses or the standard mileage rate. In this publication, "car" includes a van, pickup, or panel truck.

You may be entitled to a tax credit for an electric vehicle or a deduction from gross income for a part of the cost of a clean-fuel vehicle that you place in service during the year. The vehicle must meet certain requirements, and you do not have to use it in your business to qualify for the credit or the deduction. However, you must reduce your basis for depreciation of the electric vehicle or clean-fuel vehicle property by the amount of the credit or deduction you claim. See Depreciation Deduction, later, under Actual Car Expenses. For more information on electric or clean-fuel vehicles, see chapter 15 of Publication 535.

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