Delta tools
№ 6 · Business Vehicle
№ 6 · Business Vehicle
Should the business own your vehicle?
There are two clean ways to put a vehicle to work: the business owns it and deducts the real costs plus depreciation, or you own it and the business pays you per business mile, tax-free. Same vehicle, very different tax math — here’s how each one lands.
Built on current law — 100% bonus depreciation under the One Big Beautiful Bill Act, the IRS passenger-auto caps, and the 72.5¢ mileage rate for 2026. Generic calculators don’t model any of this.
The vehicle & your situation
What you’d pay for it, before trade-in. Round numbers are fine.
$
Check the GVWR sticker on the driver’s door jamb. Over 6,000 lbs (many full-size trucks and large SUVs) changes the math a lot.
The share of total miles that are business miles — that’s how the IRS measures it.
%
Just the business miles — commuting doesn’t count.
Gas, insurance, maintenance, registration — the whole year, all uses.
$
Not sure? Our Indiana Tax Estimator tells you in five numbers.
Every county adds its own rate on top of the 3.000% — it’s on your county’s line of last year’s IT-40, or ask us. 0 to skip.
%
5
years
Your comparison shows up here.
Fill in the vehicle and your situation, then run the comparison. Estimates are fine — this is about seeing which way the math leans before you buy or retitle anything.
The better deal
Option A · Business owns it
True after-tax cost over 5 years
$0
The better deal
Option B · You own it, paid per mile
True after-tax cost over 5 years
$0
Combined tax rate
0%
federal + Indiana
Deductions — in the business
$0
depreciation + operating costs
Deductions — per mile
$0
business miles × mileage rate
Heads up — business use at or below 50%. Accelerated depreciation (§179 and bonus) is off the table below 50% business use, so Option A is shown with slower straight-line depreciation. If real usage is higher, the answer can flip — worth confirming before you decide.
Keep the business use above 50% — the year-one write-off doesn’t stay earned. If business use slips to 50% or below in any year of the six-year recovery period, the §179 and bonus depreciation you took gets recaptured: the IRS recalculates it at straight-line and the difference comes back as income that year. If your usage is trending down, tell us before year-end, not after.
Where the money goes
Both options pay for the same vehicle and the same running costs. The difference is how much of it the tax code hands back.
What it really costs you
Handed back in tax savings
total cash out either way
What gets deducted, year by year
Option A stacks two deductions every year; Option B earns one flat per-mile amount. Watch where they cross.
Depreciation
Operating costs — gas, insurance, repairs
Per-mile deduction (Option B)
Here’s how it lands
The year-by-year numbers ▶
Your moves
Numbers without a next step are just trivia. Here’s what this comparison says to do.
Estimate only — a Delta review is required before acting. Title, financing, insurance, and personal use each move this answer, and how you title a vehicle also touches liability — that side belongs with your attorney and insurance agent. We cover the tax math, and we look at the real numbers with you before anything gets signed or retitled.
What this comparison assumes — out in the open
- Bought and placed in service on or after January 20, 2025 — that’s what qualifies it for 100% bonus depreciation under the One Big Beautiful Bill Act. Earlier purchases follow the old phase-down and need a real review.
- Passenger-auto depreciation caps come from the IRS 2025 table ($20,200 / $19,600 / $11,800 / $7,060, scaled to business use). The IRS hasn’t published the 2026 table yet, so 2026 purchases use the 2025 caps until it lands.
- Heavy SUVs (over 6,000 lb GVWR) escape those caps: §179 covers the first $32,000 and 100% bonus can absorb the rest in year one. Vehicles over 14,000 lb or clearly work-only equipment aren’t capped at all — different conversation.
- One wallet. You and your pass-through business are treated as one pocket, which is how the cash actually flows. The per-mile reimbursement itself is a wash — its value is the deduction it creates.
- The mileage rate is held at 72.5¢ for every year of the comparison. The IRS resets it annually, usually upward.
- Business use above 50% is what keeps accelerated depreciation available — and it has to stay there. If business use falls to 50% or below during the six-year recovery period, the §179 and bonus depreciation is recaptured as income (recalculated at straight-line). At or below 50% up front, the tool switches Option A to straight-line and tells you.
- S-corp Option A models the real mechanics: the corporation deducts 100% of costs and depreciation, and your personal miles come back as W-2 income at the IRS cents-per-mile rate. For a more-than-5% owner, personal miles never count as business use for the 50% test — even though they’re in your W-2.
- The add-back is valued the cheaper of the two IRS ways. Cents-per-mile (personal miles × the standard rate) when the vehicle qualifies — it can’t be used if the price tops $61,700 or the vehicle isn’t driven enough. Otherwise the annual-lease-value table: ALV × personal-mile share, plus 5.5¢ a mile for fuel the business buys. The tool tells you which method it used. Payroll tax on the add-back isn’t modeled, the ALV holds for four years before revaluing, and the method has to be locked in when the vehicle first goes in service — all Delta review items.
- Sole props: vehicle deductions also trim self-employment tax (about 14 cents on the dollar), assuming profit stays under the Social Security wage base. There’s no W-2 add-back — you can’t be your own employee; deductions are simply scaled to business use.
- State tax is whatever you enter — Indiana 3.000% plus your county’s own rate (every county sets one and they change, so you enter it rather than trust a stale table), or your own state’s combined rate.
- Not modeled: sale or trade-in at the end (and the depreciation recapture that comes with it), loan interest, and switching methods mid-stream. Those are exactly the things a Delta review catches.
Before you buy or retitle — let’s pressure-test it together.
This calculator tells you which way the math leans. It can’t see your financing, your other vehicles, or what your next three tax years look like — and this is a decision you make once and live with for the life of the vehicle. Before anything gets signed or retitled, let’s look at the real numbers together so the whole picture is in it.
Reach your Delta team at (260) 440-2747 or info@deltacpagroup.com and we’ll walk through your comparison with you.
Thank you,
Amy Grego, CPA Delta CPA Group, LLC · (260) 440-2747
Thank you,
Amy Grego, CPA Delta CPA Group, LLC · (260) 440-2747