Can Your LLC Write Off a Car Purchase?

September 21, 2025
Published by Gonzales Group CPA

Depending on your business, a car can be much more than just a personal means of transportation. However, purchasing a car as an LLC is a big investment and it’s important to be aware of the tax requirements and other legal financial aspects. At the Gonzales Group, a respected CPA in San Antonio TX, we can help you understand how you can potentially write off a car purchase.

In an LLC, you can deduct a portion of the car expenses related to business use, such as client meetings, transporting goods, or traveling to job sites. However, the vehicle must be used for business purposes. If you also use it for personal trips, the deductions will only apply to the business portion of usage.

There are two IRS-approved deduction methods from which you must choose: standard mileage vs actual expenses. These impact your options further down the line, so it’s important to make the right choice for your business.

With standard mileage you can deduct a set amount for each business mile you drive. For example, in 2025, the IRS standard mileage rate is 70 cents per mile. This rate covers the costs of gas, maintenance, insurance, and depreciation. Tolls and parking fees are deducted separately. This is a solid choice if you drive a lot but have a low-maintenance vehicle, and it allows for more straight-forward recordkeeping.

With the actual expenses option, you deduct the actual costs incurred from using the vehicle, which can include fuel and oil, repairs and maintenance, tires, insurance premiums, registration fees, loan interest, lease payments, and depreciation. This option is a good choice for high-maintenance and expensive vehicles, as it can lead to higher deductions, but also requires more recordkeeping. Also, you cannot switch from the actual expenses method to the standard mileage method once a choice is made.

Depreciation is another key point to consider when it comes to additional significant deductions. Standard mileage spreads it out over the life of the vehicle. However, if you want to make more deductions early on, then you’ll need to choose the actual expenses option and choose the Section 179 Deduction or the Bonus Depreciation option. The type of vehicle – light, heavy,  specialized, vocational – plays a significant role in how much can be deducted.

Writing off a car purchase through your LLC can provide substantial tax savings, but it requires careful planning and documentation. Whether you choose the mileage or actual expense method, understanding how these deductions work can help you make more informed decisions. To ensure you’re maximizing your deductions and following all applicable laws, turn to Gonzales Group, a respected CPA in San Antonio TX, to help you make the best decisions for your business.

Categorised in: Business Tips, Can Your LLC Write Off a Car Purchase?, Tax Info

This post was written by Gonzales Group CPA