Can I Take Mileage and Depreciation on My Taxes?

You cannot claim the standard mileage rate and a separate depreciation deduction on the same vehicle in the same year. The IRS treats mileage and depreciation on your taxes as two paths to the same end: the standard mileage rate already contains a depreciation component (35 cents of the 72.5-cent-per-mile rate for 2026), so every business mile you write off is quietly writing down the car’s basis at the same time.¹ If you want to deduct depreciation as its own line, you have to use the actual expenses method instead and calculate it on Form 4562.² The choice is made per vehicle, per year, and it carries consequences that stretch across the entire time you own the car.

Why You Can’t Stack the Two Deductions

The standard mileage rate is a rolled-up number. Fuel, oil, tires, maintenance, insurance, registration, and depreciation are all folded into the 72.5 cents per mile you multiply against your business miles for 2026.¹ You do not get to add any of those categories back on top. Parking fees and tolls tied to business trips are the only additional out-of-pocket costs you can layer alongside the mileage rate.

Inside that single figure, the IRS designates 35 cents per mile as depreciation for 2026.¹ Drive 15,000 business miles this year, and your vehicle’s tax basis quietly drops by $5,250 whether you think of it that way or not. That is the depreciation. Trying to also fill out Form 4562 for the same vehicle would double-count it, which is why the IRS bars the combination.³

The rule is vehicle-specific. If you own two cars used for business, you can run the standard mileage rate on one and actual expenses on the other in the same tax year. What you cannot do is mix the two methods on a single car.

Depreciation Under the Actual Expenses Method

Switch to actual expenses and depreciation becomes its own separate deduction. You are recovering the cost of the vehicle itself over time, on top of deducting the money you actually spent on fuel, insurance, repairs, and registration. The IRS classifies passenger vehicles as five-year property under the Modified Accelerated Cost Recovery System (MACRS), which front-loads larger write-offs in the earlier years.⁴

Every dollar of depreciation and every operating cost is scaled by business-use percentage. Drive the car 70% for work and 30% for personal errands, and 70% is what you deduct.⁵ There is no shortcut around tracking that split.

Section 179 Expensing

Section 179 lets you deduct the full cost of a qualifying vehicle the year you place it in service instead of stretching write-offs across five years. The overall Section 179 limit for 2026 is $2,560,000 across all qualifying property, but passenger vehicles run into their own separate caps under Section 280F. Heavy SUVs and trucks rated between 6,001 and 14,000 pounds have their own Section 179 ceiling, set at $31,300 for vehicles placed in service in 2025 and adjusted annually for inflation.⁶

Bonus Depreciation

Bonus depreciation adds a first-year write-off on top of regular MACRS. For qualifying vehicles acquired and placed in service after January 19, 2025, bonus depreciation has been restored to 100% permanently under the One Big Beautiful Bill Act. For passenger automobiles, though, Section 280F still caps the practical benefit: the bonus adds $8,000 to the first-year ceiling, bringing it to $20,300 for 2026 rather than $12,300.⁷

The Section 280F Caps

Even if the math would give you more, Section 280F sets hard annual ceilings on depreciation for passenger automobiles. For vehicles placed in service in 2026:⁷

With bonus depreciation:

Year 1: $20,300
Year 2: $19,800
Year 3: $11,900
Each year after: $7,160

Without bonus depreciation:

Year 1: $12,300
Year 2: $19,800
Year 3: $11,900
Each year after: $7,160

The practical effect: a $60,000 sedan cannot be fully depreciated inside the five-year MACRS window. Whatever basis remains after the caps keeps rolling forward at $7,160 per year until it is used up or the car is sold.

The First-Year Election Locks You In

Choose carefully in year one, because the IRS builds a one-way door into this. To use the standard mileage rate on a vehicle, you must elect it the first year the car is available for business use.⁵ Miss that first-year election and the standard mileage rate is off the table for that car forever.

A few other conditions apply to the standard mileage rate:⁵

You cannot have already claimed MACRS depreciation using a declining balance method, Section 179 expensing, or bonus depreciation on the vehicle.
You cannot operate five or more vehicles simultaneously for business.
You must own or lease the car.

When you are uncertain, the safer opening move is usually the mileage rate. It preserves your options. Starting with actual expenses and any form of accelerated depreciation shuts the door on ever going back.

Switching Methods Later

If you begin with the standard mileage rate, you can switch to actual expenses in any later year. There is a catch: from that point on, you must use straight-line depreciation over the vehicle’s remaining useful life, not an accelerated method.⁵ Your depreciable basis at the moment of the switch is the original cost minus the accumulated per-mile depreciation reductions from every mileage-rate year.

Going the other direction is harder. If you started with actual expenses and used any accelerated method, Section 179, or bonus depreciation, the mileage rate is gone for good on that vehicle.⁵ A narrow exception exists if you used actual expenses with straight-line depreciation only and never touched Section 179 or bonus, but that combination is rare in practice.

Depreciation Follows You to the Sale

Whichever method you pick, depreciation is not just a tax deduction in the year you claim it. It permanently reduces the vehicle’s adjusted basis, which sets your taxable gain when you sell or trade the car.

Say you bought a truck for $50,000, claimed $20,000 in depreciation across several years, and now your adjusted basis is $30,000. Sell for $35,000 and you have a $5,000 taxable gain, even though the sale price is well under what you paid. Under Section 1245 recapture, the portion of the gain attributable to depreciation is taxed as ordinary income, not at capital gains rates. The recapture amount is the lesser of your total gain or the total depreciation you claimed, or were allowed to claim even if you did not.⁸ Any gain beyond that becomes a Section 1231 gain. It all lands on Form 4797.

Standard mileage rate users are not exempt. The IRS treats the depreciation component embedded in the mileage rate (35 cents per mile for 2026) as depreciation that reduced your basis, even though you never filled out Form 4562.¹ If you claimed the mileage rate across 80,000 business miles over several years at different per-mile depreciation rates, you have to add up each year’s basis reduction to figure out where you stand at the sale. Many people are surprised by this because the mileage rate never felt like depreciation. It was.

Records You Need Either Way

Both methods require contemporaneous records under Section 274(d): the amount of each expense, the time and place of travel, and the business purpose of each trip.⁹ Contemporaneous means recorded at or near the time of the trip. A log reconstructed from memory at tax time tends not to survive an audit.

For each trip, note the date, starting point, destination, business purpose, and miles. Odometer readings at the beginning and end of the tax year establish total miles, which is how the IRS verifies your business-use percentage.⁶ GPS-based mileage-tracking apps have become the standard because the timestamps hold up under scrutiny.

If you are on the actual expenses method, keep receipts for fuel, insurance premiums, repair invoices, and registration fees along with the mileage log. Vehicle expenses are treated as listed property, which triggers stricter substantiation rules than most other business deductions, and missing documentation can wipe out the entire deduction rather than just trimming it.

1
Internal Revenue Service. IRS Notice 2026-10, 2026 Standard Mileage Rates
2
Internal Revenue Service. Instructions for Form 4562 (2025)
3
Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses – Section: Car Expenses
4
Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses – Section: Depreciation Deduction
5
Internal Revenue Service. Topic No. 510, Business Use of Car
6
Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses
7
Internal Revenue Service. Revenue Procedure 2026-15, Depreciation Limitations for Passenger Automobiles
8
Internal Revenue Service. Publication 544, Sales and Other Dispositions of Assets
9
Office of the Law Revision Counsel. 26 USC 274 – Disallowance of Certain Entertainment, Etc., Expenses