Revisiting if You Deduct All Car Expenses If Your Vehicle Has a Business Sign

It’s a question many small business owners have been asking for years: “If I advertise my business on my car, can I write off all my vehicle expenses?”

The short answer? Not quite.

A Tax Court decision clarified that slapping a business name on your vehicle, like a license plate frame or magnet, doesn’t automatically make all your car use deductible.

What Counts as a Deductible Business Trip?

To qualify for a car expense deduction, your trip must be primarily for business purposes. That means over half of the trip’s purpose must be tied to your work, like picking up business supplies, making bank deposits, attending training, or grocery shopping where most of the items are for your business.

Two Ways to Claim Vehicle Deductions

When it’s time to file taxes, you have two options to deduct business vehicle use:

1. Standard Mileage Rate

Use the IRS standard rate, which is 70 cents per mile in 2025, and multiply it by the number of business miles driven. This method is straightforward and widely employed.

Check the IRS website if you have question on the current rates: https://www.irs.gov/tax-professionals/standard-mileage-rates

2. Actual Expense Method

Add up all vehicle costs, gas, repairs, maintenance, insurance, and depreciation, and calculate what portion of those expenses relates to business. For example, if you drove 3,000 business miles out of 10,000 total miles, you could deduct 30% of your total vehicle expenses.

Claiming vehicle deductions—especially under the actual expense method—requires solid documentation. The IRS requires clear proof to support your business use of the vehicle. Be sure to keep:

• A mileage log showing date, destination, purpose, and miles driven for each trip

• Receipts or invoices for gas, insurance, repairs, and maintenance

• Total annual mileage and a breakdown of personal vs. business miles

• Evidence of recurring business activities (like supply runs)

Good records help maximize deductions and reduce your risk in case of an audit.

What About That Business Sign?

Having a sign or decal on your car might promote your business, but it doesn’t make personal errands deductible. You can, however, deduct the cost of the sign itself as a marketing or advertising expense, just not the miles driven unless the trip meets business-use criteria.

This Means:

A sign can boost your visibility, but won’t automatically boost your deductible mileage.

To stay safe at tax time, keep detailed records of all your business-related trips, no matter which deduction method you choose.