Depreciation on a vehicle for self-employed - mileage deduction vs actual expenses

I can help clarify this for you! When you use the standard mileage rate, it already factors in average costs for depreciation, maintenance, repairs, gas, oil, and insurance. That's why it's called "standard" - it's meant to simplify things. If you choose the standard mileage rate in the first year you use the vehicle for business, you're correct that you're establishing the ability to switch between standard mileage and actual expenses in future years. If you choose actual expenses in the first year, you're locked into that method for the life of the vehicle. Regarding your specific question - no, you can't claim both standard mileage AND depreciation separately. It's one or the other. The standard mileage rate already includes an estimated amount for depreciation. For your registration and sales tax question - yes, you can deduct these as separate expenses even when using standard mileage! These are considered separate "fixed" expenses. You would prorate these based on your business use percentage (so if 60% business use, you'd deduct 60% of these costs). You'd report these on Schedule C where you report your business income and expenses.

Hey, I had almost the same situation last year. I found this amazing tool called taxr.ai (https://taxr.ai) that helped me figure out this exact vehicle depreciation situation. I was totally confused about whether to use standard mileage or actual expenses for my new work truck, and the site analyzed my specific situation and showed me exactly which approach would save me the most money. What I really liked is that it showed me a side-by-side comparison of what I'd save with each method over the lifetime of my vehicle. It literally saved me thousands by showing me when to switch methods. It also explained how registration and sales tax deductions work with the standard mileage rate. Super helpful for self-employed folks who drive a lot.

Just wanted to update! I tried taxr.ai after seeing it mentioned here and wow - I've been doing it wrong for years. For my situation with my truck (60% business use), I should have been using actual expenses from the beginning. The tool showed me I've been leaving about $1,800 per year on the table by using standard mileage. Plus, it helped me identify several vehicle-related deductions I never knew about, like a portion of my garage rent since I store my work equipment in the vehicle. Their depreciation calculator made it super simple to understand how much I can deduct each year.

If you're having trouble getting clear answers about vehicle depreciation from the IRS, try Claimyr (https://claimyr.com). I was in the same boat - couldn't figure out if I should amend previous returns to fix how I handled my business vehicle. After weeks of trying to reach someone at the IRS, I used Claimyr and got connected to an actual IRS agent in under 20 minutes! They have this cool demo video showing how it works: https://youtu.be/_kiP6q8DX5c The agent I spoke with confirmed I could file an amended return to correct how I handled my vehicle expenses and even walked me through exactly what forms to use. Saved me so much stress and potentially an audit headache. Honestly worth it just to get a definitive answer from the source.

I have to admit I was super skeptical about Claimyr, but I tried it yesterday after seeing it mentioned here. Holy crap, it actually worked! I've been trying to get through to the IRS for WEEKS about my vehicle depreciation question, and within 35 minutes I was talking to an actual agent. The agent confirmed that I CAN claim the sales tax and registration fees separately even while using standard mileage, which will save me close to $500 this year. The funny thing is the agent also pointed out that I would've been better off using actual expenses for my particular vehicle situation last year. Too late now, but at least I know for next time. Never thought I'd say this, but it was actually a pleasant experience talking to the IRS!

I've been self-employed for 15 years and I recommend keeping detailed records regardless of which method you choose. Track all your expenses AND your mileage so at tax time you can run the numbers both ways and choose whichever gives you the bigger deduction. You can switch from standard mileage to actual expenses after the first year (but not from actual back to standard), so having good records gives you flexibility. Also dont forget that if you use standard mileage, you can still separately deduct parking fees and tolls for business trips! A lot of people miss that.

Just to add one thing - if your SUV has a gross vehicle weight rating over 6,000 pounds, it might qualify for additional Section 179 deduction if you use actual expenses method. Worth checking the weight specs because it could make a BIG difference in year 1.

Great question! I went through a similar situation last year with my 2018 pickup truck. One thing that really helped me was creating a spreadsheet to compare both methods using my actual numbers. For a $26,000 SUV with 60% business use, the math can go either way depending on your annual mileage and maintenance costs. Since you're using it for the first time in 2025, you're smart to go with standard mileage to preserve your options. The standard mileage rate for 2025 is 67 cents per mile, so if you drive 15,000 business miles, that's $10,050 in deductions right there. One tip: definitely track your actual expenses this year too (gas, maintenance, insurance, etc.) even though you're using standard mileage. That way next year you can compare and see if switching to actual expenses makes sense, especially once your SUV starts needing more maintenance. And yes, you can absolutely deduct the prorated registration fees and sales tax! I deducted about $400 last year doing this. Just multiply your total registration/sales tax by your business use percentage and include it as a separate line item on Schedule C. The key is keeping excellent records either way. I use a simple mileage tracking app and take photos of all vehicle-related receipts. Makes tax time so much easier!