Can I Deduct My Work Truck?

Lifaver Trujillo, CPA, PLLC — Raleigh-Durham, North Carolina

A Client's Question

This week, one of my clients asked me a question I hear almost every week:

"Lifaver, can I deduct my truck?"

He owns a small construction business here in the Durham area, and like many of my contractor clients, he uses his truck for everything—driving to job sites, hauling materials, and meeting with customers.

His question was simple, but the complete answer has several parts that are worth explaining carefully, just as I explained them to him.

Why This Question Matters

For a contractor, a truck isn't a luxury—it's a business tool, just as essential as a drill or a saw.

Because it's often one of the largest business expenses of the year, the difference between claiming the deduction correctly and claiming it incorrectly can mean thousands of dollars in taxes.

If the IRS ever examines your tax return, your vehicle is one of the first things they'll review because it's easy to use it for both business and personal purposes. That's why it's important to understand the rules from the beginning—not after the year has ended, when it's much harder to reconstruct how you used your truck month by month.

The Simple Explanation

Here's what I typically tell my clients:

You can deduct the portion of your truck expenses that relates to business use—not automatically 100% just because the business paid for it.

There are two ways to calculate your deduction:

1. Actual Expense Method

Add up everything you spent on your truck during the year, including:

• Fuel

• Maintenance

• Insurance

• Repairs

• Depreciation

  
  

Then deduct the percentage that represents business use.

2. Standard Mileage Rate

Instead of tracking every expense, simply multiply your business miles by the IRS standard mileage rate for that tax year.

In my experience, the standard mileage method is simpler for many contractors who spend a lot of time driving for work. However, if you purchased a new vehicle during the year, the actual expense method may provide a larger deduction because of depreciation.

Here's something many business owners don't realize:

If you purchased a new truck for your business this year, you may be able to deduct the entire purchase price immediately instead of depreciating it over several years. This is possible under Section 179, which currently allows businesses to deduct up to $2.5 million in qualifying equipment and business vehicles each year. That limit is high enough that most small and mid-sized contractors qualify without any issues.

If you financed your truck with a loan, many business owners are surprised to learn that the interest on that loan may also be deductible as a business expense, based on the same percentage of business use as the vehicle itself. It's worth discussing this with your CPA, especially if you financed more than one vehicle or piece of equipment this year.

Another question I hear often is:

"What about mileage tracking apps on my phone?"

Yes—they're an excellent tool.

Most apps automatically track your trips using GPS and generate reports you can send me at the end of the year instead of trying to remember months of driving from memory.

A Real-Life Example

Let's look at my client's situation.

He uses his truck 80% for business and 20% for personal use—taking his kids to school, running errands, and similar activities. He drives approximately 20,000 miles per year. If he keeps accurate mileage records showing 16,000 business miles, he can deduct those miles using the standard mileage rate. Alternatively, he can total all of his actual vehicle expenses for the year and deduct 80% of those costs. What he cannot do is deduct 100% of the truck because part of its use is personal.

The Most Common Mistakes I See

Before deciding which method to use, it's important to avoid these common mistakes:

• Not keeping a mileage log. Without documentation, there's no way to support your business-use percentage if the IRS asks.

• Assuming the entire vehicle is deductible simply because it was purchased under the business name.

• Mixing personal and business mileage in the same log without clearly identifying which trips were for business.

• Forgetting that Section 179 has specific rules for larger trucks and SUVs that differ from the rules for passenger vehicles.

• Switching back and forth between the actual expense method and the standard mileage method without understanding the IRS rules about when changes are allowed.

  
  

My Recommendation as Your CPA

My advice is simple:

Start tracking your mileage today—even if it's just a note on your phone every time you use your truck for work. It doesn't have to be complicated.

Record:

• The date

• Your destination

• The business purpose of the trip

• Miles driven

  
  

If you're planning to purchase a new business vehicle this year, talk with me before you buy it—not afterward. Sometimes, simply adjusting the timing of the purchase or choosing a different type of vehicle can significantly improve your tax deduction.

I also recommend using a mileage tracking app instead of relying on your memory at the end of the year. Most apps are free or inexpensive, and they can save you hours of trying to reconstruct your driving months later. Before deciding which deduction method is best, let's review your specific situation together. There isn't a one-size-fits-all answer that works for every business owner.

Next Steps

• Start (or restart) your mileage log this week—even if it's just a simple note on your phone.

• Gather your fuel, maintenance, and insurance receipts in case the actual expense method provides a larger deduction.

• If you purchased—or plan to purchase—a new business vehicle this year, let me know before you buy it.

• Schedule a tax planning meeting so we can determine which deduction method is best for your business.

Questions About Your Business?

At Lifaver Trujillo CPA PLLC, we help small businesses throughout North Carolina with:

• Bookkeeping

• Payroll

• Tax Preparation

• Tax Planning

• Financial Consulting

  
  

If you'd like to schedule a consultation, we'd be happy to help.

Phone: (919) 590-3610

Email: info@ltrujillocpa.cm

Address: 4804 Page Creek Ln Ste 114, Durham, NC 27703

Disclaimer: This article is for educational purposes only and should not be considered tax, legal, or financial advice. Every business is different.