If you’re self-employed and use your car for business, you can deduct certain business-related car expenses. There are two options for claiming deductions:
Actual Expenses. To use the actual expense method, you need to figure out the actual costs of operating the car for business use. You are allowed to deduct the business-related portion of costs related to gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments).
Standard Mileage Rate. To use the standard mileage deduction, multiply 56 cents (in 2021) by the number of business miles traveled during the year.
Deduct car expenses such as parking fees and tolls attributable to business use separately no matter which method you choose.
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