Should I use the Standard Mileage method or the Actual Expenses method for vehicle expenses?

Usually, you can use the method that will give you the biggest deduction for your vehicle expenses.

The standard mileage rate for 2025 is $0.7 per mile for your job or business. Record keeping is easier for the standard mileage method because you just need to keep track of your business and personal mileage.

For the actual expense method, you will need to keep track of the receipts for the following expenses:

• Gas and oil
• Repairs and maintenance
• Auto loan interest expense
• Insurance and registration fees
• Depreciation or lease fees
• Any other automobile expense

To use the standard mileage method for a car you own, you must choose to use it in the first year the car is available for use in your business. Then, in later years, you can choose to use the standard mileage method or actual expenses method.

For a car you lease, you must use the standard mileage method for the entire lease period (including renewals) if you choose the standard mileage rate in the first year.

To use the standard mileage method, you must own or lease the car. Also you must not have:

• Operated five or more cars at the same time, as in a fleet operation
• Claimed a depreciation deduction for the car using any method other than straight-line
• Claimed a Section 179 deduction on the car
• Claimed the special depreciation allowance on the car
• Claimed actual expenses if you leased the vehicle
• Claimed actual car expenses after 1997 for a car you leased.