How are miles split between business and personal use?

To split the expenses of a vehicle used for both business and personal purposes, the general rule is to allocate costs strictly by the miles driven for each purpose. You calculate your business-use percentage, which sets the exact share of operating and depreciation expenses you may deduct.

The formula

Divide the miles driven for business during the year by the total miles driven during the year (for any purpose).

Business miles vs. commuting

Business miles (deductible): driving from one work location to another, visiting clients, traveling to business meetings away from your regular workplace, and driving from home to a temporary work location.

Personal / commuting miles (not deductible): travel between your home and your main or regular workplace is commuting —a personal expense. These don't become business miles even if you make business calls during the trip or carry tools and equipment.

If the use changes during the year

If you start the year using a vehicle 100% for personal use and later convert it to business, the percentage is figured in two steps:

Example: personal-only for the first 6 months; in the last 6 months you drove 15,000 miles (12,000 for business) → 80% for that period → annualized 40% (80% × 6/12).

Records you must keep

For the bigger picture on vehicle deductions, see business expenses that are tax-deductible.