Depreciation deductions for most cars and trucks are limited by the "luxury car/passenger vehicle" limitations imposed by the IRS under Code Section 280(f).
Vehicles with a Gross Vehicle Weight Rating (GVWR) greater than 6,000 lbs. avoid these caps or limits!
If you use your truck, van, suv or car in your business, you can deduct the costs of operating and maintaining it. You generally can deduct either your actual expenses or the standard mileage rate (for 2014 the mileage rate for business use is 56 cents per mile).
It is important that if you use your vehicle for both business and personal use, that you track the mileage for each category of use (whether you claim actual expenses or the mileage rate). Instead of figuring actual expenses, you may be able to use the standard mileage rate to figure the deductible costs of operating your car, van, pickup, or panel truck for business purposes. You can use the standard mileage rate for a vehicle you own or lease. The standard mileage rate is a specified amount of money you can deduct for each business mile you drive. It is announced annually by the IRS. To figure your deduction, multiply your business miles by the standard mileage rate for the year.
Generally, if you use the standard mileage rate, you cannot deduct your actual expenses. However, you may be able to deduct 100% of business-related parking fees and tolls. In addition, you may deduct the business percentage of interest on your vehicle loan, and certain state and local taxes.
How to figure the business percentage use: You drove your van 20,000 miles during the year. 16,000 miles were for business and 4,000 miles were for personal use. You can claim only 80% (16,000 / 20,000) of the cost of the business percentage items listed above.
If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. In later years, you can choose to use the standard mileage rate or actual expenses. If you want to use the standard mileage rate for a car you lease, you must choose to use it for the entire lease period.
If you deduct actual expenses, you can deduct the cost of the following items: depreciation or lease payments, rental fees, garage rent, licenses, repairs, gas, oil, tires, interest, insurance, parking fees and tolls.