Auto Expenses: Mileage vs. Actual

Taxpayers are allowed to deduct 53.5¢ for all business miles driven in 2017. The 2018 rate is 54.5¢. Taxpayers are also allowed to keep track of actual auto expenses and deduct whichever is greater. My analysis has shown that the mileage method almost always comes up with the greater deduction.

No matter which method you choose, you must keep a mileage log. Actual expenses need to be reduced by the personal use percentage. Depreciation is also very limited, and must be reduced for personal use. The limit on depreciation is why the mileage method comes out greater.

Please note that recordkeeping for the mileage method is much simpler. The mileage method also helps out people like me. I sometimes use my wife’s car for business. Business miles are business miles, no matter which car I drive.