# Actual expense method

> Alternative to the IRS standard rate: deduct real vehicle costs in proportion to business use.

**URL:** https://quilometragem.com/glossary/actual-expense-method

**Summary:** Alternative to the IRS standard rate: deduct real vehicle costs in proportion to business use.

- The actual expense method sums all vehicle costs for the year (fuel, maintenance, insurance, depreciation, loan interest) and applies the business-use percentage.
- It requires substantiation of every cost and a clean split between business and personal miles.
- Opposite of the IRS standard rate.
- Often yields a larger deduction in heavy-maintenance years but requires more work.

The actual expense method sums all vehicle costs for the year (fuel, maintenance, insurance, depreciation, loan interest) and applies the business-use percentage. It requires substantiation of every cost and a clean split between business and personal miles. Opposite of the IRS standard rate. Often yields a larger deduction in heavy-maintenance years but requires more work.