If you use your car for business, you ordinarily can deduct car expenses. You can use one of the two following methods to figure your deductible expenses.

• Standard mileage rate.
• Actual car expenses.

For 2008, the standard mileage rate for business use of your vehicle is 50½ cents per mile.

Actual Car Expenses Include:

• Depreciation
• Licenses
• Lease payments
• Registration fees
• Gas, Oil, Insurance, Repairs, Tires
• Tolls, Garage Rent, Parking Fees

Choosing the standard mileage rate

If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year you use it in your business. Then in later years, you can choose to use either the standard mileage rate or actual expenses.

After the first year, you should figure both your standard mileage and actual expenses and use the one that is most beneficial.

* If you want to use the standard mileage rate for a car you lease, you must use standard mileage for the entire lease period.