Key Takeaways

• Not all driving qualifies for a business vehicle tax deduction; commuting to and from your primary office generally does not.
• The IRS allows two deduction methods: the standard mileage rate and the actual expense method.
• The business mileage rate increased to 76 cents per mile effective July 1, 2026, following a rare mid-year adjustment.
• Accurate mileage logs and documentation are essential to support your deduction if you’re ever audited.
• The best deduction method depends on your business use, vehicle, and overall tax situation, not just the size of the deduction.

For many dentists, a vehicle is more than just a way to get to and from the office. It may also be used to attend continuing education courses, visit suppliers, travel between practice locations, meet with advisors, or handle other business-related responsibilities.

If that’s the case, you may be eligible to deduct at least a portion of your vehicle expenses. The key is understanding what qualifies, choosing the right deduction method, and maintaining the records the IRS expects.

Not Every Mile Counts

One of the most common misconceptions is that every mile driven somehow qualifies as a business expense. Unfortunately, that’s not the case.

Your daily commute between home and your primary office is considered personal commuting and generally isn’t deductible.

However, driving for legitimate business purposes often is. Examples may include:

• Traveling between multiple practice locations
• Meeting with your CPA, attorney, or financial advisor
• Attending continuing education courses or conferences
• Visiting a bank, supplier, or other business vendor
• Running business-related errands for the practice

Keeping business and personal driving separate is one of the first steps toward maximizing your deduction while remaining compliant.

Two Ways to Calculate Your Deduction

The IRS generally allows business owners to choose between two methods for calculating vehicle expenses.

Standard Mileage Rate

The simplest option is using the IRS standard mileage rate. Rather than tracking every fuel purchase, maintenance bill, and repair, you multiply your qualified business miles by the IRS mileage rate.

Because fuel prices increased significantly during the first half of 2026, the IRS announced a rare mid-year adjustment. Beginning July 1, 2026, the business mileage rate increased from 72.5 cents to 76 cents per mile. For many business owners, this method is preferred, since it is the most straightforward to document.

Actual Expense Method

The second option is tracking the actual costs of operating your vehicle throughout the year. This may include expenses such as:

• Fuel
• Oil changes and maintenance
• Repairs
• Tires
• Insurance
• Registration fees
• Depreciation (when applicable)

You then deduct the percentage of those costs attributable to business use. Depending on how much you drive for business and the type of vehicle you own, one method may provide a larger deduction than the other.

Good Records Matter

No matter which method you choose, documentation is critical. The IRS expects business owners to maintain records showing:

• The date of each business trip
• The destination
• The business purpose
• The number of business miles driven

Today, many smartphone apps make mileage tracking almost effortless, eliminating the need for handwritten logbooks. Without adequate records, even legitimate deductions may be disallowed during an audit.

Don’t Let the Tax Deduction Drive the Decision

While tax deductions are valuable, they shouldn’t be the primary reason for purchasing or replacing a vehicle. Whether you’re considering buying a new vehicle, leasing one, or continuing to use your current vehicle, the decision should first make good business sense. 

Tax savings are simply one factor in the overall analysis. Likewise, if your business use changes over time, it’s worth reviewing whether your current deduction method is still the most beneficial.

Make Sure You’re Getting the Deduction You’re Entitled To

Vehicle deductions are one of many areas where small details can make a meaningful difference. Choosing the right deduction method, maintaining accurate records, and understanding which miles qualify can help ensure you’re receiving every deduction you’re entitled to while staying compliant with IRS requirements.

At Edwards & Associates, we work with dental practice owners throughout the year, not just during tax season, to help identify opportunities, answer questions, and develop tax strategies that support the long-term success of their practices. If you have questions about business vehicle expenses or other tax planning opportunities, we’re here to help.