Can You Take Depreciation and Mileage on Schedule C?

No, you cannot claim the standard mileage rate and a separate depreciation deduction for the same vehicle in the same year. Depreciation and mileage on Schedule C are not add-ons to each other: the standard mileage rate already has a depreciation component baked into it, so writing off depreciation on top would deduct the same cost twice. For 2026, the rate is 72.5 cents per mile, and 35 cents of that is the built-in depreciation piece.¹ What you actually get is a choice between two methods, and the choice you make in a vehicle’s first business year shapes what you can do with it for as long as you own it.

The Two Methods and What Each Already Covers

The IRS lets sole proprietors deduct vehicle costs one of two ways, and you pick one method per vehicle per tax year.²

The standard mileage rate is a single per-mile figure that stands in for everything: gas, insurance, repairs, and depreciation, combined. Multiply business miles by 72.5 cents for 2026 and you have your deduction. You cannot deduct any of those underlying costs on the side. The only extras you can add are parking fees and tolls paid on business trips.³

The actual expenses method works the opposite way. You deduct the real costs of running the vehicle, scaled to business use: gas, oil, tires, insurance, registration, repairs, garage rent, tolls, parking, and the business share of any loan interest. Depreciation is separate here and is calculated on Form 4562.³ The paperwork is heavier, but the deduction can be larger, especially on expensive vehicles or ones with high operating costs.

So the answer to the stacking question is structural. Depreciation is already inside the mileage rate. It is a separate line under actual expenses. Either way, you claim it once.

Why the First-Year Choice Matters

The method you pick in the first year the vehicle is available for business use decides which doors stay open.

If you want the option of ever using the standard mileage rate on a vehicle, you have to elect it in that first year.² After that first year you can switch to actual expenses later if you prefer, but from the switch forward you must use straight-line depreciation for the vehicle’s remaining useful life. Accelerated methods are off the table.

Going the other direction is more restrictive. If you use actual expenses in year one and claim MACRS depreciation, a Section 179 deduction, or bonus depreciation, you cannot switch that vehicle to the standard mileage rate in any later year.² The accelerated depreciation you already claimed has changed the cost basis in a way that is incompatible with how the mileage rate handles depreciation internally. Pick actual expenses with any of those accelerated methods and you are on that track for the life of the vehicle.

Business-Use Percentage Sets the Ceiling

When a car serves both business and personal purposes, only the business share is deductible. Drive 15,000 miles with 10,000 for business and your business use is about 67%. Under the mileage rate, only those 10,000 miles count. Under actual expenses, only 67% of the running costs count.

Business-use percentage also gates depreciation methods. Section 179, bonus depreciation, and MACRS accelerated depreciation all require business use above 50%.⁴ At 50% or below, you have to use straight-line depreciation under the Alternative Depreciation System, which produces smaller annual write-offs. And if your business use drops below 50% after you already claimed accelerated depreciation in an earlier year, part of the excess may have to be recaptured as income.

Depreciation Caps on Passenger Vehicles

Even when you go the actual-expenses route, Section 280F caps how much depreciation you can deduct each year on a passenger vehicle weighing 6,000 pounds or less. The caps are adjusted annually for inflation. For vehicles placed in service in 2025, the first-year cap is $20,200 if you claim bonus depreciation and $12,200 if you do not, with lower ceilings in each subsequent year.⁵ The 2026 figures had not been released at the time of writing but tend to follow the same pattern with modest increases.

Bonus Depreciation in 2026

The One, Big, Beautiful Bill made 100% bonus depreciation permanent for qualified property acquired after January 19, 2025.⁶ For a passenger vehicle placed in service in 2026, that means you can use the higher first-year cap. Bonus depreciation does not let you exceed the Section 280F ceiling, but it does raise the year-one limit substantially compared with regular MACRS alone.

Section 179 Expensing

Section 179 lets you deduct part or all of a vehicle’s cost in the year you place it in service rather than depreciating it over several years. The Section 280F cap still applies to passenger vehicles, so a Section 179 election cannot push your first-year deduction on a car past the applicable ceiling.

Heavy Vehicles and SUVs Over 6,000 Pounds

The passenger-vehicle caps do not apply to trucks, vans, and SUVs with a gross vehicle weight rating above 6,000 pounds. For depreciation-cap purposes, the IRS defines a passenger automobile as a four-wheeled vehicle rated at 6,000 pounds or less, so heavier vehicles fall outside those limits.⁷ A qualifying heavy vehicle can potentially be fully expensed under Section 179 and bonus depreciation in year one.

There is one carve-out for SUVs. Section 179 on an SUV rated between 6,000 and 14,000 pounds GVWR is capped at $31,300 for 2025, with the 2026 figure adjusted for inflation.⁸ Cost above that cap can still be written off through bonus depreciation or regular MACRS without the Section 280F passenger ceilings. Pickups with a bed at least six feet long and heavy work vans are generally not subject to the SUV-specific cap.

Which Miles Actually Count

Only business miles are deductible, and the IRS treats commuting as personal no matter how the drive feels. Driving between home and a regular workplace is a personal expense even if you take business calls along the way.³ Parking fees at your regular workplace are personal too.

Deductible business miles typically include trips between two work locations on the same day, drives to meet clients, travel to a temporary work site outside your metropolitan area, and errands like the bank or post office for business purposes.

The home-office rule can shift a lot of miles into the deductible column. If your home office qualifies as your principal place of business, trips from home to any other work location in the same trade or business count as business miles rather than commuting.³ Without a qualifying home office, that same first drive of the day is a nondeductible commute.

Records the IRS Expects

Whichever method you use, you need documentation that supports both the amount and the business purpose of your driving. Weak records are one of the fastest ways to lose a vehicle deduction on audit.

A mileage log should capture the date, destination, business purpose, and miles for each trip, plus your total mileage for the year (business, commuting, and personal) and odometer readings at the start and end of the year.³ Paper or an app is fine. The IRS does not require a particular format, but the log has to be contemporaneous and reliable.

If you use actual expenses, keep receipts for gas, oil changes, tires, repairs, insurance, registration, lease payments, and loan interest, along with the purchase agreement or financing paperwork showing original cost, since that number is your depreciation starting point.³

Hold vehicle records for at least three years from the date you file, or two years from the date you paid the tax, whichever is later.⁹ If you depreciate over several years, keep records for the whole depreciation period plus the three-year window after the final return that includes the deduction.

Where the Deduction Goes on Schedule C

Standard mileage rate filers complete Part IV of Schedule C, which asks for the date the vehicle was placed in service and totals for business, commuting, and personal miles.¹⁰ Multiply business miles by 72.5 cents and put the result on Line 9. You do not need Form 4562 for the mileage rate alone.

Actual-expenses filers claiming depreciation on a vehicle placed in service during the current year must file Form 4562. Part V of that form is where listed property, including automobiles, is reported. You enter the business-use percentage, the adjusted cost basis, and the depreciation method.⁷ The depreciation amount flows to Line 13 of Schedule C, and your other actual costs (gas, insurance, repairs) go on Line 9.

Recapture When You Sell

Depreciation catches up with you when the vehicle leaves the business. If you sell for more than the adjusted basis (original cost minus all depreciation claimed), the IRS treats part of the gain as ordinary income rather than capital gain. That is depreciation recapture under Section 1245.¹¹ The recaptured amount is the lesser of your total gain or your total prior depreciation, taxed at ordinary rates. Any gain above that is capital gain. Sell at a loss and there is no recapture.

Recapture applies to standard mileage rate users too. You never claimed a separate depreciation deduction, but the IRS treats 35 cents of every 2026 business mile (and the corresponding amounts for prior years) as deemed depreciation. That accumulated figure reduces your basis and can trigger recapture if you sell at a gain.¹ Many sole proprietors miss this, so it is worth tracking your cumulative deemed depreciation even on the mileage rate.

Penalties for Getting It Wrong

Stacking the mileage rate with a separate depreciation deduction, inflating business miles, or coming up short on documentation can produce an accuracy-related penalty. Under Section 6662, the IRS charges a penalty equal to 20% of the underpayment caused by negligence or a substantial understatement of tax.¹² The improper portion of the deduction is disallowed and interest accrues on any additional tax. Picking one method per vehicle, sticking with it consistently, and keeping clean records is the simplest way to stay out of that territory.

1
Internal Revenue Service. 2026 Standard Mileage Rates
2
Internal Revenue Service. Topic No. 510, Business Use of Car
3
Internal Revenue Service. Publication 463, Travel, Gift, and Car Expenses
4
Office of the Law Revision Counsel. 26 USC 280F – Limitation on Depreciation for Luxury Automobiles
5
Internal Revenue Service. Rev. Proc. 2025-16
6
Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One, Big, Beautiful Bill
7
Internal Revenue Service. Instructions for Form 4562
8
Office of the Law Revision Counsel. 26 USC 179 – Election to Expense Certain Depreciable Business Assets
9
Internal Revenue Service. How Long Should I Keep Records
10
Internal Revenue Service. Instructions for Schedule C (Form 1040)
11
Office of the Law Revision Counsel. 26 US Code 1245 – Gain from Dispositions of Certain Depreciable Property
12
Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments