Mileage vs Actual Vehicle Expenses
Purpose
The IRS allows you to deduct EITHER mileage or actual expense. The mileage deduction is the number of business miles your drive for business times the mileage rate, which was 67 cents per mile in 2024 (this number changes every year). For actual expenses, you can deduct the gas, repairs, insurance, interest expense and depreciation times a business use percentage of the car. The IRS lets you take the higher deduction each year, however, in order to switch back and forth, you MUST take the mileage deduction the first year you have the car. (By taking mileage the first year, the means you can’t take depreciation)
Example
| Mileage Calculation | Actual Expenses |
| Number of miles driven for the year = 3,000 | Gas Receipts = $428.00 |
| GSA rate per mileage = $0.67 per mile | Oil Change = $200.00 |
| New Tires = $1,000 | |
| Total = $2,010.00 | Total = $1,628.00 |
Since the Milage calculation is higher than the actual expenses, we would expense the mileage calculation total.
Reference
GSA Mileage Rate: https://www.gsa.gov/travel/plan-a-trip/transportation-airfare-rates-pov-rates-etc/privately-owned-vehicle-pov-mileage-reimbursement