What's the Difference Between the Standard Mileage Rate and Actual Vehicle Expenses?

When you use your car for business, you can deduct those costs using either the standard mileage rate or your actual vehicle expenses. The standard mileage rate for 2024 is 67 cents per mile for business driving — you simply track your business miles and multiply. The actual expense method lets you deduct a portion of your real costs — gas, insurance, repairs, registration, and depreciation — based on the percentage of total miles driven for business. The standard mileage method is simpler and often better for newer, fuel-efficient cars, while the actual expense method can produce a larger deduction if you have a gas-heavy or expensive-to-maintain vehicle. If you want to use the actual expense method, you need to use it in the first year you use the vehicle for business — you can always switch from actual to standard mileage later, but not the other way around after taking depreciation.