From the desk of STAC Bizness Solutions CEO, Shawna Aho

Running a dental practice means juggling a lot more than patient care. Some days you’re the clinician, other days you’re the manager, and sometimes you’re the one running across town to pick up supplies or attending a networking event after hours. Your car plays a role in all of that.

The good news is that the IRS allows you to deduct part of the cost of owning and operating your vehicle when it’s used for business. The catch? You need to follow some clear rules and keep good records. Let’s walk through how it all works!

When Does Your Car Count as a Business Expense?

The IRS draws a line between personal driving and business driving. If you’re heading from home to your primary office, that’s considered a personal commute and can’t be deducted. But if you’re driving between offices, making a run to the dental lab, visiting a supplier, attending continuing education, or participating in community outreach, those miles usually count as business use.

You don’t have to own the car under your practice’s name to qualify. Leasing or owning it personally is fine, but you do need to document how and when it’s used. A mileage log or tracking app is your best friend here. Without records, the IRS may simply disallow the deduction.

Two Ways to Deduct Vehicle Costs

Dentists have two main choices when it comes to calculating car deductions: the standard mileage rate or the actual expense method.

The standard mileage rate is the easier of the two. Each year the IRS sets a cents-per-mile amount (70 cents in 2025), and you multiply that by your documented business miles. If you drove 5,000 qualifying miles, for example, you’d have a deduction of $3,500. It’s simple and takes care of fuel, insurance, and wear-and-tear in one number.

The actual expense method is more detailed but sometimes more rewarding. Here you total up what you actually spent on gas, insurance, maintenance, depreciation, and other car-related costs. Then you apply the percentage of business use. If 40% of your driving is practice-related and your total annual vehicle costs are $9,000, you’d be able to deduct $3,600.

Both methods are perfectly legitimate. The choice usually comes down to whether you want simplicity or whether your car is expensive to operate and the actual expenses give you a bigger deduction.

Buying vs. Leasing: What’s the Difference?

If you’re considering putting a new car into service for your practice, you’ll also need to think about whether to buy or lease.

Buying gives you the ability to claim depreciation, which spreads the cost of the vehicle over several years, or sometimes lets you deduct a large portion up front if the vehicle qualifies. Large SUVs and trucks, for example, can allow for much bigger first-year write-offs under Section 179 or bonus depreciation rules.

Leasing, on the other hand, keeps things simpler. You can deduct the business portion of your lease payments, and you don’t have to navigate depreciation limits. For some dentists, especially those who like predictable monthly costs and regularly upgrade vehicles, leasing is the easier path.

Understanding Depreciation

Depreciation is simply the IRS’s way of recognizing that a car loses value over time. If you buy a vehicle, you can’t usually deduct the entire cost in one year. Instead, you write it off gradually (unless you use special provisions that let you accelerate the deduction).

Most passenger cars fall under the MACRS system, which spreads deductions over several years but also limits how much you can take each year. If you buy a $40,000 sedan and use it 60% for business, you can only depreciate $24,000 of its cost, and only within the annual caps.

Section 179 is another option. It allows you to deduct the full purchase price of qualifying equipment, including vehicles, in the year you put it into service. For passenger cars, the deduction is limited, but for heavier vehicles over 6,000 pounds, the limits are much higher. That’s one reason why SUVs and trucks are popular with business owners.

Finally, there’s bonus depreciation, which works alongside Section 179. It lets you take a large portion of the cost in the first year, though the percentage has been reduced in recent years. Like Section 179, it’s most helpful when the vehicle is heavier and not subject to the strict luxury auto caps.

The right method depends on your practice’s finances and how you want to spread out your deductions. If you’d prefer a big upfront tax break, Section 179 or bonus depreciation may be appealing. If steady write-offs over time make more sense, regular MACRS depreciation is a good fit.

Where Car Deductions Show Up in a Dental Practice

To make this more concrete, let’s look at a few common scenarios. If you own two practices and drive between them, those miles count. If you swing by a lab to pick up crowns or deliver impressions, that trip qualifies too. Conferences and CE courses are also legitimate business miles. Even professional networking, such as attending association events or meetings with your banker, falls under business use. 

The point is car expenses aren’t just about driving to and from patients. They’re about all the behind-the-scenes work it takes to keep your practice running.

Keeping Good Records

No matter which deduction method you choose, documentation is non-negotiable. The IRS expects you to keep a log of when you drove, where you went, and why. Writing “drove to lab to pick up dentures” is much better than simply “business miles.”

You can do this with a paper logbook, but most dentists find apps (like MileIQ, TripLog, or Driversnote) that track mileage automatically much easier. Many of these can distinguish between personal and business trips with a swipe, which keeps the process painless. 

Avoiding Common Missteps

There are a few traps dentists sometimes fall into. The first is claiming commuting miles. Those don’t count. The second is estimating business use without keeping records; auditors don’t accept guesses. Another mistake is mixing business and personal expenses without a clear method of allocation. And don’t forget about the small stuff: parking fees and tolls related to business trips are deductible too.

A Few Final Thoughts…

So, should you deduct your car as part of running your dental practice? In most cases, yes. The method you choose will depend on how much you drive, the type of vehicle you own, and how diligent you are with your records.

If simplicity is your goal, the standard mileage rate is hard to beat. If your car is expensive to operate or you want to take advantage of depreciation rules, the actual expense method may give you a bigger benefit. 

Vehicle deductions can save you a meaningful amount each year, but they’re also one of the areas most often challenged in audits. For busy dental practice owners, it pays to get this right.

At STAC Bizness Solutions, we specialize in helping practice owners with bookkeeping, payroll, and financial strategy. We’ll walk you through the vehicle deduction rules, set up a system for tracking expenses, and make sure your practice is getting the tax savings it deserves.

If you’re not sure whether you’re taking full advantage of car deductions, let’s talk! Reach out to STAC Bizness Solutions today at 844-424-9637 , and we’ll help you find the smartest, most compliant way forward.