Is a Commercial Vehicle a Tax Write-Off?
If you use a vehicle for business purposes, you may be able to deduct some — or even most — of its costs on your federal tax return. Whether a commercial vehicle qualifies as a tax write-off depends on how it’s used, how it’s purchased, and how it’s classified under IRS rules.
What Counts as a Commercial Vehicle?
A commercial vehicle is generally any vehicle used primarily for business purposes. This can include:
- Company-owned cars
- Work trucks and vans
- Delivery vehicles
- Contractor or service vehicles
- Certain SUVs used for business
The key factor is business use, not simply ownership. If you use the vehicle for both personal and business purposes, only the business-use percentage is deductible.
Two Main Deduction Methods
The Internal Revenue Service (IRS) allows business owners to deduct vehicle expenses using one of two methods:
1. Standard Mileage Rate
You deduct a set amount per business mile driven. This method is simple and requires tracking:
- Total business miles
- Dates and purpose of trips
The IRS sets the mileage rate annually.
2. Actual Expense Method
You deduct the actual costs of operating the vehicle, including:
- Gas
- Insurance
- Repairs and maintenance
- Registration fees
- Lease payments or depreciation
If the vehicle is used 80% for business, you can deduct 80% of eligible expenses.
Section 179 and Bonus Depreciation
In some cases, businesses may deduct a large portion — or even the full cost — of a qualifying commercial vehicle in the year it is placed into service through Section 179 depreciation.
This often applies to:
- Heavy SUVs
- Cargo vans
- Pickup trucks over certain weight limits
However, strict rules apply regarding weight, usage percentage, and business necessity.
Recordkeeping Requirements
To support a tax deduction, you should maintain:
- A mileage log
- Receipts for expenses
- Documentation showing business purpose
Poor recordkeeping can lead to disallowed deductions during an audit.
Conclusion
Yes, a commercial vehicle can be a tax write-off — but only to the extent it is used for business. Choosing between the mileage method and actual expenses depends on your situation. Because tax rules can be complex, consulting a CPA or tax professional is often advisable to maximize your deduction while staying compliant.
