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IRS.gov Website
Publication 334
taxmap/pubs/p334-023.htm#en_us_publink1000313502

Car and Truck Expenses(p31)

rule
If you use your car or truck in your business, you may be able to deduct the costs of operating and maintaining your vehicle. You also may be able to deduct other costs of local transportation and traveling away from home overnight on business.
Tax Tip
You may qualify for a tax credit for qualified plug-in electric vehicles, qualified plug-in electric drive motor vehicles, and alternative motor vehicles you place in service during the year. See Form 8936 and Form 8910 for more information.
taxmap/pubs/p334-023.htm#en_us_publink1000313504

Local transportation expenses.(p31)

rule
Local transportation expenses include the ordinary and necessary costs of all the following. Local business transportation does not include expenses you have while traveling away from home overnight. Those expenses are deductible as travel expenses and are discussed later under Travel, Meals, and Entertainment. However, if you use your car while traveling away from home overnight, use the rules in this section to figure your car expense deduction.
Generally, your tax home is your regular place of business, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located.
taxmap/pubs/p334-023.htm#en_us_publink1000313505

Example.(p31)

You operate a printing business out of rented office space. You use your van to deliver completed jobs to your customers. You can deduct the cost of round-trip transportation between your customers and your print shop.
EIC
You cannot deduct the costs of driving your car or truck between your home and your main or regular workplace. These costs are personal commuting expenses.
taxmap/pubs/p334-023.htm#en_us_publink1000313507
Office in the home.(p31)
Your workplace can be your home if you have an office in your home that qualifies as your principal place of business. For more information, see Business Use of Your Home, later.
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Example.(p32)

You are a graphics designer. You operate your business out of your home. Your home qualifies as your principal place of business. You occasionally have to drive to your clients to deliver your completed work. You can deduct the cost of the round-trip transportation between your home and your clients.
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Methods for Deducting
Car and Truck Expenses(p32)

rule
For local transportation or overnight travel by car or truck, you generally can use one of the following methods to figure your expenses.
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Standard mileage rate.(p32)

rule
You may be able to use the standard mileage rate to figure the deductible costs of operating your car, van, pickup, or panel truck for business purposes. For 2013, the standard mileage rate is 56.5 cents per mile.
EIC
If you choose to use the standard mileage rate for a year, you cannot deduct your actual expenses for that year except for business-related parking fees and tolls.
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Choosing the standard mileage rate.(p32)
If you want to use the standard mileage rate for a car or truck you own, you must choose to use it in the first year the car is available for use in your business. In later years, you can choose to use either the standard mileage rate or actual expenses.
If you use the standard mileage rate for a car you lease, you must choose to use it for the entire lease period (including renewals).
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Standard mileage rate not allowed.(p32)
You cannot use the standard mileage rate if you:
  1. Operate five or more cars at the same time,
  2. Claimed a depreciation deduction using any method other than straight line, for example, ACRS or MACRS,
  3. Claimed a section 179 deduction on the car,
  4. Claimed the special depreciation allowance on the car,
  5. Claimed actual car expenses for a car you leased, or
  6. Are a rural mail carrier who received a qualified reimbursement.
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Parking fees and tolls.(p32)
In addition to using the standard mileage rate, you can deduct any business-related parking fees and tolls. (Parking fees you pay to park your car at your place of work are nondeductible commuting expenses.)
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Actual expenses.(p32)

rule
If you do not choose to use the standard mileage rate, you may be able to deduct your actual car or truck expenses.
Tax Tip
If you qualify to use both methods, figure your deduction both ways to see which gives you a larger deduction.
Actual car expenses include the costs of the following items.
DepreciationLease paymentsRegistration
Garage rentLicensesRepairs
GasOilTires
InsuranceParking feesTolls
If you use your vehicle for both business and personal purposes, you must divide your expenses between business and personal use. You can divide your expenses based on the miles driven for each purpose.
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Example.(p32)

You are the sole proprietor of a flower shop. You drove your van 20,000 miles during the year. 16,000 miles were for delivering flowers to customers and 4,000 miles were for personal use (including commuting miles). You can claim only 80% (16,000 ÷ 20,000) of the cost of operating your van as a business expense.
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More information.(p32)

rule
For more information about the rules for claiming car and truck expenses, see Publication 463.
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Reimbursing Your Employees
for Expenses(p32)

rule
You generally can deduct the amount you reimburse your employees for car and truck expenses. The reimbursement you deduct and the manner in which you deduct it depend in part on whether you reimburse the expenses under an accountable plan or a nonaccountable plan. For details, see chapter 11 in Publication 535. That chapter explains accountable and nonaccountable plans and tells you whether to report the reimbursement on your employee's Form W-2, Wage and Tax Statement.