When you use your personal car for business purposes, or if your business has a dedicated vehicle, you may be able to deduct some of the expenses related to keeping it operational. Learning how to manage car expense deductions can be difficult, but well worth it.

There are two ways you can claim a deduction for vehicle related expenses: Actual expense method or the standard deduction. If you chose to use the actual expense method you will be required to keep track of all of your costs in an itemized list.  The standard mileage rate is applied at 56 cents per business mile driven, and does not include tolls and parking fees.

Most often, a newer car will result in a bigger deduction come tax time if you use the itemized method. When you opt for the itemized method, you can deduct depreciation of the vehicle. Also, you can’t opt for the standard deduction if you have previously claimed accelerated depreciation deductions in prior years.

If you use your vehicle for both business and personal, you can only claim a deduction on the business portion of your use. Because of this you have to keep track of how and when you use the vehicle for business purposes and total it at the end of the year. Even if you try, you’ll never succeed if you try to claim 100% of your vehicle when you only own one car.