We bought a truck for our new business because we needed it for the business. How do I claim it on taxes and will a get more of a refund if I claim it?

Yes, an expense for your business reduces your self employment income which reduces both your personal income tax and your self employment tax (if you have a profit).  Business miles divided by the total miles for the tax year determine the business use percentage.  You will need to upgrade to TurboTax Online Self Employment and TurboTax will guide you to do that.

You have two options to choose from for business use of your vehicle.  

1. Actual expenses, OR
2. Standard mileage rate (this is the easier way to track without keeping all your receipts)

For 2023, the standard mileage rate for self-employed and business is 65.5 cents per mile.  TurboTax will calculate this for you, See the rules below.

To use the standard mileage rate, you must own or lease the car and:

• You must not operate five or more cars at the same time, as in a fleet operation,
• You must not have claimed a depreciation deduction for the car using any method other than straight-line,
• You must not have claimed a Section 179 deduction on the car,
• You must not have claimed the special depreciation allowance on the car, and
• You must not have claimed actual expenses after 1997 for a car you lease.

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

Actual expenses - To use the actual expense method, you must determine what it actually costs to operate the car for the portion of the overall use of the car that's business use. Include gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments) attributable to the portion of the total miles driven that are business miles.

• Where do I enter my business expenses such as vehicle or other expenses?

Either way, you must keep the receipts and/or mileage records until you sell or dispose of your vehicle.  At that time it will also be a taxable event.