Auto Deductions Explained: The 2025 Tax Rules You Need to Know

Most business owners are driving right past thousands in tax savings without realizing it. In 2025, the IRS raised the standard mileage rate to 70 cents per mile, but that’s only the beginning.

In this episode, Mike breaks down exactly how to structure your auto deductions, avoid costly mistakes, and choose between the mileage method and actual expenses.

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Chapters

(00:00) You’re Missing Out on Auto Deductions
Most business owners overlook vehicle write-offs that could save thousands.

(01:00) What’s New for 2025
IRS mileage rate jumps to $0.70 per mile, plus bonus depreciation returns to 100%.

(03:15) Mileage Method vs. Actual Method
How each deduction works and the rules for switching methods. Low-cost, high-mileage cars lean mileage. High-cost, heavy vehicles lean actual.

(08:10) The 6,000-Pound Vehicle Rule
How GVWR impacts deductions and when Section 179 + bonus depreciation apply.

(09:50) Recordkeeping Requirements
Mileage logs, receipts, and documentation you’ll need if the IRS asks.

(13:00) What Counts as Business Miles (and What Doesn’t)
Meetings, errands, and client visits qualify. Commuting does not.

(16:12) Real-Life Example: $7,000 vs. $10,000 Deduction
Side-by-side comparison of mileage vs. actual expenses.

(18:32) How to Claim the Deduction by Entity
Schedule C for sole props vs. accountable plans for S-Corp owners.

(19:51) Action Steps to Maximize 2025 Auto Deductions
Pick your method, track carefully, and understand depreciation rules.

Podcast Host:

Mike Jesowshek, CPA – Founder and Host of Small Business Tax Savings Podcast
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🎙 ABOUT THE PODCAST
The Small Business Tax Savings Podcast is your go-to resource for cutting-edge tax strategies to help entrepreneurs legally slash their tax bills. Hosted by Mike Jesowshek, CPA, this show breaks down complex tax topics into clear, no-fluff insights so you can keep more of your hard-earned money.