Best vehicle deduction options for Single Member LLC with extensive travel - personal car vs buy vs lease for 2025 tax year?
I rack up roughly 16,000 business miles annually as a single-member LLC. My business has me flying all over the US, and I use my personal vehicle to get to airports and to drive to clients within a 6-hour radius (I keep detailed logs of everything). Currently about 85% of my vehicle use is business and 15% is personal. With tax planning for 2025, I'm trying to figure out what makes the most financial sense. Should I: - Keep using my personal vehicle and take the standard mileage deduction? - Buy a dedicated business vehicle? - Lease a business car instead? - Is there some other option I haven't considered? I'm really trying to maximize my deductions while staying compliant. Anyone have experience with a similar situation or advice on the best approach for a single-member LLC with this much business travel?
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Pedro Sawyer
The standard mileage deduction is often the simplest option when you have high business use like yours (85%). For 2025, the rate is expected to be around 67 cents per mile, which would give you approximately $10,720 in deductions (16,000 × $0.67). If you buy or lease a vehicle primarily for business, you could potentially use actual expenses instead, which includes depreciation, lease payments, gas, insurance, repairs, etc. However, this requires more detailed record-keeping and can get complicated with mixed-use vehicles. One important thing to consider is vehicle weight. If you purchase a vehicle over 6,000 lbs (like many SUVs), you might benefit from more generous depreciation rules, including potential Section 179 deduction in the year of purchase.
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Mae Bennett
•If I decide to buy a business vehicle, would I have to use it 100% for business, or could I still use it occasionally for personal stuff? And does the standard mileage rate ever make sense for a newer vehicle with higher actual expenses?
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Pedro Sawyer
•You don't need to use a business vehicle 100% for business purposes, but you can only deduct the business portion of expenses. If you purchase a vehicle and use it 85% for business, you can deduct 85% of the actual expenses or take the standard mileage rate on 85% of your total miles. For newer vehicles, actual expenses often exceed the standard mileage rate, especially in the first few years when depreciation is highest. This is particularly true for more expensive vehicles and those that qualify for accelerated depreciation. The standard mileage rate tends to be more beneficial for older vehicles with fewer repair costs or less expensive vehicles with good fuel efficiency.
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Beatrice Marshall
After struggling with a similar situation, I found this amazing tool called taxr.ai (https://taxr.ai) that helped me figure out my best options. I run a consulting business that has me traveling across multiple states, and I was confused about whether to keep using my personal car or get a dedicated business vehicle. Their system analyzed my mileage logs and expense patterns and showed me exactly how much I'd save under different scenarios. The coolest part was they showed me the break-even point based on my specific situation - like at what price point and mileage a new business vehicle made more sense than the standard deduction.
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Melina Haruko
•Does it actually check your specific state tax laws too? I'm in California and the vehicle rules here seem more complicated than federal.
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Dallas Villalobos
•I'm curious - did it help with record keeping too? My biggest issue is tracking business vs personal miles consistently. I always mess up logging and end up taking a smaller deduction because I'm paranoid about an audit.
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Beatrice Marshall
•Yes, it does account for state-specific tax considerations. For California specifically, it flagged several state-specific rules that affected my decision, including how the state handles depreciation differently than the federal government in some cases. Regarding record keeping, that was actually one of the most helpful features for me. It has a mileage tracking component that integrates with the tax planning part. You can connect it with your calendar to automatically categorize trips, and it creates audit-ready reports that satisfy IRS requirements. I was in the same boat - taking smaller deductions because I was worried about documentation. That changed once I had proper tracking in place.
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Dallas Villalobos
I just wanted to follow up about my experience with taxr.ai after trying it based on the recommendation here. It was seriously eye-opening! I uploaded my messy mileage logs and some basic info about my vehicle and business, and it showed me I was leaving about $3,200 in deductions on the table yearly. For my situation (about 14,000 business miles in a 3-year-old SUV), it recommended I switch to actual expenses instead of mileage deduction and showed exactly why. The automated mileage tracker has already made my life way easier - no more scribbling odometer readings on receipts! Really wish I'd found this sooner.
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Reina Salazar
If you need to talk to someone at the IRS about business vehicle deductions (which can get complicated fast), good luck getting through on their business line. After being on hold for HOURS trying to get clarity on mixed-use vehicle depreciation, I discovered Claimyr (https://claimyr.com) and it was a total game-changer. They got me connected to an actual IRS agent in about 20 minutes instead of the 3+ hours I was spending on hold. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with clarified exactly how to handle my vehicle situation (I drive about 20k miles/year, 70% business) and confirmed I was eligible for a deduction I wasn't sure about. Saved me from making a costly mistake on my return.
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Saanvi Krishnaswami
•Wait - how does this actually work? Don't you still have to wait in the same IRS queue as everyone else? I don't understand how they could get you through faster.
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Demi Lagos
•Sorry but this sounds too good to be true. The IRS phone system is notoriously awful and I doubt any service can actually bypass their queue system. Sounds like you just got lucky with timing or something.
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Reina Salazar
•It doesn't bypass the queue - it basically waits in line for you. Their system navigates the IRS phone tree and holds your place in line, then calls you when an agent picks up. So instead of being stuck on hold yourself for hours, you can go about your day and just get notified when an agent is actually ready. I was skeptical too when I first heard about it. What made me try it was I had already spent two separate days trying to get through without success. My question about vehicle depreciation for my business was pretty specific and I needed an official answer. I was literally in a meeting when my phone rang and there was an IRS agent on the line. Completely changed my perspective on dealing with tax questions.
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Demi Lagos
I need to eat my words on the Claimyr thing. After my skeptical comment, I decided to try it myself since I had a question about vehicle deductions for my lawn care business that I couldn't get resolved. I've always used my truck for both business and personal use (about 70/30 split) and needed clarification on switching from standard mileage to actual expenses. After trying THREE TIMES to get through to the IRS myself and giving up after 1+ hours each time, I used the Claimyr service. Got a call back in 45 minutes with an actual IRS rep who walked me through the whole process. They explained I could switch methods but couldn't go back to standard mileage later if I used actual expenses on that vehicle. Seriously saved me from making a costly mistake. Wish I hadn't been so quick to doubt.
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Mason Lopez
Have you considered a hybrid approach? I'm a single-member LLC too, and I use two vehicles. My older car (2018 Civic) is 100% business use - I take standard mileage on that one because it's simple and the car is fully depreciated. Then I have my newer SUV that I use for mixed personal/occasional business when I need to haul equipment. This separation makes recordkeeping way cleaner and avoids the whole business/personal allocation mess. Plus, insurance is often cheaper on a vehicle that's only driving to client sites versus one that's also used for family trips.
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Vera Visnjic
•How do you handle insurance and registration for the 100% business car? Do you put that in your business name? My insurance was weird about covering a personal vehicle used primarily for business.
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Mason Lopez
•I have the business vehicle registered and insured under my LLC name with a commercial auto policy. You're right that it can be tricky with personal policies - many won't properly cover business use or will charge extra. The commercial policy actually ended up being around the same price after shopping around, and it provides better coverage for my situation. The registration in the business name also makes it clearer to the IRS that it's a dedicated business asset. One thing to note though - if you go this route, you need to be disciplined about never using that vehicle for personal trips, not even stopping for personal errands during business trips.
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Jake Sinclair
I lease a car through my single-member LLC and it's been great tax-wise. With a lease, you can deduct the business portion of your payments plus operating expenses OR use the standard mileage rate - whichever is better. Just make sure the lease is actually in your business name if you go this route. The best thing is no worries about depreciation recapture if you sell it later. The downside is those annoying excess mileage fees if you drive a lot, which sounds like you might with 16k business miles.
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Brielle Johnson
•Did you have to pay a higher rate for a business lease vs a personal one? I looked into this and the dealer wanted to charge me more when I mentioned it was for my business.
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