Ask the Tax Editor: Questions on Automobile Bills
Each week in our Ask the Tax Editor collection, Joy Taylor, The Kiplinger Tax Letter editor, solutions questions on subjects submitted by readers. This week, she’s 4 tax questions from readers on deducting automobile bills, together with the usual mileage allowance. (Get a free issue of The Kiplinger Tax Letter or subscribe.)
1. Standard mileage price for Schedule C corporate affairs driving
Question: I’m retired however work part-time as a basketball referee. I’m an unbiased contractor and file Schedule C. Can I declare the usual mileage allowance for driving from my dwelling to the sport web site and again dwelling?
Joy Taylor: Generally, no. The value of corporate affairs driving for self-employed individuals is a deductible corporate affairs expense. However, the IRS usually considers the miles pushed from your home to your first recreation web site and the drive out of your final recreation web site again to your property as nondeductible commuting bills. However, in case you have a number of recreation websites in a day, you’ll be able to declare the mileage touring between recreation websites.
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If you do take the deduction, you’ll be able to declare both your precise bills, together with gasoline, repairs and depreciation in your automobile, or the IRS’s standard mileage allowance. For 2026, the usual mileage price for corporate affairs driving is 72.5 cents per mile for the primary half of the 12 months and 76 cents per mile for July by December. If you employ the IRS’s normal mileage price, it’s also possible to deduct the price of any tolls or parking charges that you just pay.
Be positive to maintain a contemporaneous mileage log detailing every of your journeys. It will make it a lot simpler so that you can work out your complete corporate affairs mileage when you find yourself making ready your tax return.
2. Employee driving
Question: I’m a full-time worker and I get a W-2 annually. Sometimes, my job requires that I drive my very own automobile between consumer conferences. My firm would not reimburse me for any miles pushed. Can I deduct the mileage expense on my tax return?
Joy Taylor: Unfortunately, no. Prior to 2018, staff who itemized on Schedule A have been in a position to deduct miscellaneous itemized deductions, together with their unreimbursed worker corporate affairs bills, to the extent the overall quantity exceeded 2% of adjusted gross revenue. The 2017 Tax Cuts and Jobs Act quickly suspended these miscellaneous itemized deductions, and final 12 months’s “One Big Beautiful Bill” ended them completely.
3. Buying a big pickup truck
Question: I purchased a big pickup truck in March that I exploit 100% for my Schedule C corporate affairs. I heard that I can expense the complete value on my 2026 federal tax return. Is this true?
Joy Taylor: It relies upon. Yes, the federal tax legal guidelines permit self-employed people who purchase a giant truck that they use 100% for corporate affairs to expense the total value. However, there’s a key restrict to know when expensing corporate affairs belongings. The complete quantity expensed below Section 179 can’t exceed the taxable revenue out of your corporate affairs. First-year bonus depreciation would not have this limitation.
4. Tax breaks for corporate affairs automobiles purchased in 2026
Question: I’m self-employed and am planning to purchase a automobile that I’ll use 100% in my corporate affairs. Can I take a depreciation deduction for the auto?
Joy Taylor: Yes, you need to have the ability to. There are beneficiant tax breaks for corporate affairs automobiles first put in use in 2026.
- For passenger automobiles, with first-year bonus depreciation, the first-year depreciation deduction is $20,300 for brand spanking new and used vehicles. The second- and third-year depreciation caps are $19,800 and $11,900. After that, it’s $7,160.
- For passenger automobiles for which bonus depreciation shouldn’t be taken, the first-year depreciation cap is $12,300.
- For heavy SUVs, you’ll be able to write off the total value, due to bonus depreciation.
- For huge pickup vans, you’ll be able to expense the total value. Note that the overall quantity of corporate affairs belongings expensed cannot exceed the taxable revenue out of your corporate affairs. Bonus depreciation doesn’t have this restrict.
About Ask the Editor, Tax Edition
Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions on tax subjects. You’ll discover full particulars of how one can submit questions in every publication. Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.
We have already obtained many questions from readers on subjects associated to tax adjustments within the One Big Beautiful Bill, retirement accounts and extra. We will proceed to reply these in future Ask the Editor roundups. So hold these questions coming!
Not all questions submitted shall be printed, and a few could also be condensed and/or mixed with different comparable questions and solutions, as required editorially. The solutions offered by our editors and consultants on this Q&A collection are for common informational functions solely. While we take cheap precautions to make sure we offer correct solutions to your questions, this data doesn’t, and isn’t meant to, represent unbiased monetary, authorized, or tax recommendation. You shouldn’t act, or chorus from performing, based mostly on any data offered on this function. You ought to seek the advice of with a monetary or tax advisor relating to any questions you will have in relation to the issues mentioned on this article.
