If you use your car for business purposes, the IRS allows you to deduct expenses incurred from your taxable income.
You will have to itemize your deductions, which is done on Form 2106 (Employee Business Expenses), if you were reimbursed by your employer. Form 2106-EZ can be used if you didn’t receive any form of reimbursement. Self-employed taxpayers or those who work on contract can use a Schedule C to claim expenses.
When you drive your vehicle for business expenses, you may use standard mileage rate to calculate your expenses. You will have to keep track of your mileage driven for business, either using a smartphone or an actual paper log. Whichever way you chose to track your mileage, taking the deduction is fairly simple: you multiply the miles by (53 and a half cents), the 2017 tax year allowable rate according to the IRS.
You can also deduct the actual expenses you incur while driving your car for business. However, unless the business use of your vehicle is more than 50% of the time the vehicle is driven, usually the actual method of deduction is less beneficial.