Free 2026 calculator
Business Vehicle Depreciation Calculator
Two methods: Standard mileage (miles × 70¢) vs Actual expense (depreciation + real costs). Heavy vehicles (≥6,000 lbs GVWR) can deduct up to $30,500 via Section 179. Standard cars are capped at ~$12,200 in Year 1 by IRS rules. Enter your numbers to see which saves more.
Vehicle type
15,000 miles × $0.70/mile (2025 rate)
MACRS 20% × $28,000 basis, capped at $12,200
Standard mileage saves $4,900 more in Year 1.
Standard mileage also simplifies recordkeeping — you only need to track miles, not individual expenses. Note: if you use mileage in Year 1, you must continue using it for that vehicle.
Standard vehicle: Year 1 actual deduction limited to ~$12,200 by IRS Section 280F luxury car rules regardless of vehicle cost. Confirm 2026 limit with IRS Publication 463.
2026 vehicle depreciation limits at a glance
2026 limits pending IRS publication. Values shown are 2025 limits as reference.
| Vehicle type | Year 1 limit | Year 2 | Year 3 | Year 4+ |
|---|---|---|---|---|
| Standard car (< 6,000 lbs) | $12,200 | $19,500 | $11,700 | $6,960/yr |
| Heavy SUV (≥ 6,000 lbs GVWR) | $30,500 via Sec. 179 | MACRS on remaining | MACRS on remaining | MACRS on remaining |
| Full-size truck / cargo van | Up to full cost (Sec. 179 + bonus) | MACRS on remaining | MACRS on remaining | MACRS on remaining |
Frequently asked questions
What is the standard mileage rate for 2026?+
The IRS standard mileage rate for 2025 business driving is 70 cents per mile (IRS Rev. Proc. 2024-38). The 2026 rate is announced by the IRS in December 2025 or January 2026. This calculator uses the 2025 rate (70¢) as a placeholder — update your calculation once the IRS publishes the 2026 rate.
Standard mileage vs actual expense: which is better?+
It depends on your vehicle cost and miles. Standard mileage is simpler (track miles only) and wins for high-mileage drivers with lower-cost vehicles. Actual expense wins in Year 1 for expensive heavy vehicles (trucks, SUVs ≥6,000 lbs GVWR) where Section 179 allows up to $30,500 deduction. For standard cars, the IRS luxury car limit caps Year 1 actual expense at ~$12,200 — so high-mileage drivers on standard cars often do better with mileage.
What is the IRS luxury car depreciation limit for 2026?+
For standard passenger vehicles (under 6,000 lbs GVWR), Section 280F limits the total first-year deduction to approximately $12,200 without additional first-year depreciation (2025 limit; 2026 TBD from IRS). This cap applies regardless of the vehicle's purchase price — a $80,000 car and a $30,000 car both face the same ~$12,200 Year 1 cap under actual expense. Confirm 2026 limits in IRS Publication 463 or Rev. Proc. published after Sep 2025.
What is a heavy vehicle for tax purposes?+
A vehicle with a Gross Vehicle Weight Rating (GVWR) of 6,000 pounds or more that is NOT a passenger automobile — typically SUVs, pickup trucks, cargo vans, and some crossovers. Heavy vehicles escape the Section 280F luxury car limits but face a different cap: Section 179 for heavy SUVs is limited to $30,500 (2025 limit; 2026 TBD). Full-size pickup trucks and large vans (over 6,000 lbs, not SUV class) may qualify for full Section 179 with no SUV cap.
Can I switch from standard mileage to actual expense?+
You can switch from actual expense to standard mileage in a later year, but you CANNOT switch from standard mileage to actual expense for the same vehicle if you used the standard mileage rate in the first year you placed the vehicle in service. This makes the first-year choice permanent for each vehicle. If you lease, the restriction is different — consult IRS Publication 463.
Does business use percentage affect the deduction?+
Yes. If you use a vehicle 80% for business, only 80% of the vehicle's cost is your 'business basis' for depreciation purposes. Both methods scale with business use: standard mileage only counts business miles; actual expense applies the business percentage to all vehicle-related costs and depreciation. You must maintain a mileage log for either method.
What is bonus depreciation for vehicles in 2026?+
Under current law (TCJA phase-down), bonus depreciation in 2026 is 20% (down from 100% in 2022, 60% in 2024, 40% in 2025). For standard passenger vehicles, the luxury car cap (~$12,200) limits the benefit regardless. For heavy vehicles, 20% bonus dep on the basis not taken via Section 179 can add to the deduction. Congress is considering legislation to restore higher bonus depreciation rates.