The IRS gives you two ways to deduct vehicle expenses. The standard mileage rate (67 cents per mile for 2024) is the simpler option. You multiply your total business miles by that rate and take the deduction. The actual expense method lets you deduct gas, insurance, maintenance, repairs, tires, and depreciation based on the percentage of miles that were business-related. If you drove 20,000 miles total and 15,000 were for business, you’d deduct 75% of all vehicle costs.

For most small business owners, the standard mileage rate is easier to manage and often produces a solid deduction. The actual expense method can save more if you drive a vehicle with high operating costs or if your business-use percentage is very high. One thing to know is that you generally need to choose the standard mileage rate in the first year you use a vehicle for business if you want that option going forward. Switching methods later has restrictions, so talk to your CPA before committing.

The tracking itself is where most people fall short. Use an app like MileIQ, Everlance, or Hurdlr. These run in the background on your phone and detect trips using GPS. You just swipe to classify each trip as business or personal. It takes a few seconds per day and produces an IRS-compliant mileage log at year end. If you prefer low-tech, a notebook in your vehicle works too. Write down the date, where you went, the business purpose, and the miles driven. The IRS does not accept estimates or logs you try to recreate months later.

Know what counts as business mileage and what doesn’t. Driving from home to a fixed office location is commuting and not deductible. Driving from your office to a client site, supplier, or job location is deductible. If you work from home and have no separate office, driving from home to a client or job site is generally deductible. The rules get specific depending on your situation, so understand the distinction for your setup.

Industries like landscaping, property services, and other field-based businesses often rack up serious mileage. If you’re driving to multiple job sites every day, vehicle expenses can easily be one of your top three deductions. Missing them or guessing at the numbers means you’re overpaying on taxes.

Record your mileage in your accounting software monthly or at least quarterly. In QuickBooks you can log mileage directly or create an expense entry tied to vehicle costs. Don’t let twelve months pile up and try to sort it out at tax time. If you’re working with a provider for bookkeeping services in Jacksonville FL, they can build vehicle expense tracking into your monthly process so nothing gets missed and your books are always ready when your CPA needs them.

The bottom line is that tracking has to happen in real time. The best method in the world doesn’t help if you don’t have the documentation to back it up. Pick an app, turn it on, and spend thirty seconds a day classifying trips. That small habit can easily be worth thousands of dollars in deductions over the course of a year.