Personal vehicle for LLC business - What exactly counts as deductible business mileage?

You're right about scenarios 1 and 2 being business mileage - any trip from your home office to perform business activities counts since your home is your principal place of business. For scenario 2, the primary purpose of the trip is business, so the entire mileage counts even with personal stops (though time spent at personal locations isn't deductible). For scenario 3, maintenance trips for a vehicle used for business are considered business mileage. Since you're using the actual expense method, you'll deduct the percentage of business use for all vehicle expenses, including maintenance costs. For scenario 4, unfortunately, the initial trip to acquire the vehicle isn't considered business mileage. The IRS views this as a personal trip to acquire an asset, even if that asset will later be used for business. This trip would be considered part of the cost basis of the vehicle rather than a deductible expense. Keep a detailed mileage log showing the business purpose for each trip - apps like MileIQ can help with this. Remember that with actual expenses, you'll need to track your business use percentage carefully since personal use isn't deductible.

I had the same questions when I started using my truck for my handmade furniture business. I tried keeping spreadsheets but kept forgetting to log trips. I found this app called taxr.ai (https://taxr.ai) that automatically tracks all my business expenses and mileage. It connects to my accounts and even analyzes my bank statements to find business purchases I might have missed. What was most helpful for me was it categorized my truck expenses correctly for the actual expense method - separating the acquisition costs from the operational costs. It also flagged that dealer pickup trip as non-deductible, which I wouldn't have known. The app even generates IRS-ready documentation if you ever get audited. Saved me hours of headaches and probably caught deductions I would have missed.

Just wanted to follow up - I decided to try taxr.ai after my initial skepticism, and I'm honestly impressed. The mileage tracking is way more accurate than other apps I've used (looking at you, MileIQ with your constant "were you driving?" notifications). What really sold me was how it handled my mixed-use trips. I do a lot of errand-combining to save time, and the app lets me easily split trips between business and personal. It also caught several deductions I would have missed, like some online business purchases I had forgotten about. The receipt scanning feature actually reads what's on the receipt instead of just storing an image. Definitely worth checking out if you're tracking vehicle expenses for a business.

I see a lot of talk about tracking miles and expenses, but honestly the biggest headache I had was when I needed to call the IRS to clarify some vehicle deduction rules. Spent DAYS trying to get through. Finally used a service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 15 minutes instead of waiting on hold for hours. They have a demo video here: https://youtu.be/_kiP6q8DX5c The IRS agent actually gave me different advice than my accountant about vehicle deductions! Turns out there's a specific form (Form 4562) you need for listing vehicle expenses with actual expense method, and if you're using a truck over 6,000 lbs, you might qualify for additional Section 179 deductions. The call saved me thousands in deductions I would have missed.

I have to eat my words. After posting my skeptical comment, I was desperate enough to try Claimyr because I was still having issues getting answers about vehicle deductions for my construction business. Not only did I get through to the IRS in under 20 minutes, the agent I spoke with walked me through exactly how to document my truck expenses correctly. Turns out I had been calculating my business percentage incorrectly for years - I was just dividing business miles by total miles, but wasn't accounting for commuting miles properly. The agent explained that since my home is my principal place of business, I don't have "commuting" miles in the traditional sense. This literally saved me from what could have been an audit nightmare. Worth every penny just for the peace of mind.

One thing nobody's mentioned yet - don't forget to keep track of all your parking fees and tolls. Those are separately deductible expenses on top of your vehicle expenses even when using the actual expense method. I learned this the hard way after missing out on hundreds of dollars in deductions. Also, for scenario 3 (taking vehicle for service), make sure you're tracking the miles for maintenance as business miles, but ALSO keep all those repair receipts. With the actual expense method, those repair costs themselves are another deductible expense based on your business percentage.

Something else to consider - if the truck you're buying is over 6,000 lbs gross vehicle weight rating (GVWR), you might qualify for the Section 179 deduction. This could let you deduct a large portion of the vehicle's cost in the first year rather than depreciating it over time. This is especially useful with your situation since you need the truck specifically for business purposes. Just make sure your business-use percentage stays above 50% for the next few years or you might face some recapture of the deduction.

This is really helpful information everyone! I'm leaning toward the actual expense method since I'll be using a truck with higher operating costs. Quick clarification question - when you mention keeping detailed mileage logs, should I be recording odometer readings at the start and end of each business trip, or is just noting the total miles sufficient? And for mixed trips (like going to the post office but also stopping for gas), do I need to calculate the exact business portion or can I count the whole trip if the primary purpose was business? Also @Lena Kowalski, that Section 179 tip is gold! I'm looking at trucks in that weight range specifically for hauling inventory, so that could be a game changer for my first year deductions.

Great discussion here! One additional point that might be relevant for your LLC - make sure you're familiar with the "luxury vehicle" depreciation limits if your truck costs over a certain threshold (around $64,000 for 2024). These limits can significantly impact your actual expense deductions and might make the standard mileage deduction more attractive in some cases, even for trucks. Also, since you mentioned this is your first year switching to actual expenses, remember that once you choose the actual expense method for a vehicle, you're generally locked into that method for the life of that vehicle. You can't switch back to standard mileage later. So it's worth doing the math carefully for your expected usage patterns over the next several years, not just year one. One more thing - if you're planning to finance the truck, the interest on the business portion of the loan is also deductible as a business expense when using the actual expense method. This can add up to significant savings over the life of the loan.