Writing Off Your Vehicle - Mileage Method vs Actual Expense Method

Overview

One of the most important deductions you'll have as a traveling notary is your vehicle.  In most cases it will be your largest deduction so it's important to understand the two different options you have and what is required for each.  We'll start with the Mileage Method since that is the most popular and the one we generally recommend.

Mileage Method

When you use the Mileage Method, you write off the number of business miles you drove at a rate that the IRS sets each year (currently $0.760 per mile for 2026).  The concept is pretty simple.  You multiply the number of miles times that rate and that's what you report on your taxes for the business use of your vehicle.  For example, let's say you drove 20,000 miles this year.  Your mileage deduction would be 20,000 x $0.760 x 20,000 = $15,200.00.

Now, there is one big caveat to this using this method that a lot of new notaries don't know.  When you use the mileage method you cannot write off any other vehicle related expenses except parking and tolls.  That means you cannot deduct car payments, gas, repairs, maintenance, oil changes, tires, insurance...nothing at all except parking and tolls.

Actual Expenses Method

When you use the Actual Expenses Method, you have to add up all your vehicle related expenses - car payments, gas, oil change, tires, insurance, repairs, maintenance, car washes, and any other vehicle related expense (except parking and tolls - those are still tracked separately).

Then, you have to figure out the portion or percent of business miles you drove relative to the total total miles you drove all year, and multiply that percent times your total vehicle expenses to get the "business portion".  That's the amount you can deduct on your taxes.

For example, let's say you added up all of your vehicle related expenses for the year and it came to $14,000.  Let's say you drove a total of 32,000 miles for the year and 20,000 of those miles were for business.  The business percent would be 62.5% (20,000 ÷ 32,000 = .625).  So, the amount you would be able to deduct on your taxes is $8,750 (.625 x $14,000 = $8,750).

Which Method Is Better?

It depends.  Everyone's case use case will be different because it really depends on how expensive your vehicle is and the portion of business miles to total miles you typically drive in a year.  In most cases, we recommend the mileage method because based on the data we have seen, it will result in a larger deduction.

Also, the Mileage Method is less work because you don't need to keep track of all your vehicle expenses.  You just have to keep track of your business mileage and the total mileage for the year (i.e. odometer reading on December 31st minus your odometer reading on January 1st).  Regardless of which method you use, you will need to track each business trip.  You don't have to track odometer readings, but you do need to log the start, end, and business purpose of the trip.

Common Mistakes/Missed Mileage

One of the most common mistakes we see notaries make when it comes to deducting their vehicle expenses is trying to deduct their gas when they are using the Mileage Method.  Remember, the only vehicle related expense you can deduct when you are using the Mileage Method is parking and tolls.

Another common mistake notaries make is only writing off mileage to and from their signings.  You should be writing off your mileage any time you do anything business related.  Here are some we see notaries miss all the time:

• To/from the store to buy something for your business.  You can still write off your mileage even if you don't end up buying anything.
• To/from training courses
• To/from networking events
• To/from association meetups
• To/from the post office or ups if you need to mail something including Amazon returns for your business.

The point here is that you should always be thinking "is this trip business related?".  If it is, make sure you log it.  These entries can make a significant impact on how much you save on your taxes at the end of the year.

How Does Using NotaryGadget Help?

One of the most powerful features NotaryGadget has is that it automatically calculates your mileage to/from each signing along with the ability to record all your other business mileage.  Then, it instantly generates the report you need for your taxes exactly the way an accountant needs to see it.

Also, the NotaryGadget's mileage log is IRS approved.  So, if you ever get audited, all you have to do is click a button and NotaryGadget instantly generates a report you can hand to the auditor showing them exactly what they need to see.