When you’re a self-employed individual or small business owner filing a Schedule C, deducting auto mileage is an excellent way to save on taxes. The IRS offers two ways to calculate the deduction: the standard mileage rate or actual expenses. Most people find the standard mileage rate simpler, as it allows you to deduct a set amount per mile driven for business purposes.
For 2023, the standard mileage rate is 65.5 cents per mile. To qualify, you must track the miles driven for business, but keep in mind that the first stop is on you—meaning your commute from home to your first business-related destination is not deductible. After your first stop, you can start deducting business miles.
If you choose to use the actual expenses method instead, you can deduct the portion of car-related costs (gas, maintenance, depreciation, etc.) that are tied to business use.
Whichever method you choose, make sure to keep detailed records to maximize your deduction and stay compliant with IRS rules.
Feel free to reach out if you need more detailed guidance on your specific situation!
Written using ChatGPT