Employee Car

• A deduction is available to employees that use personal vehicles in their employer's business. The deductible amount applies only to unreimbursed expenses incurred by the employee for the actual mileage allocated to business purposes. However, this deduction is limited to amounts that exceed 2 percent of the employee's adjusted gross income.
  
  

Employer Car

• The cost of maintaining a car for a business is a tax deductible expense to the company. When employees are given exclusive possession of a car and it is used significantly for non-business purposes, the value of the personal use must be reflected in the employee's gross income.
  
  

Self-Employed

• Self-employed taxpayers can deduct the costs of maintaining a car used exclusively in their business. However, if the car is used for personal and business purposes, an allocation based on mileage must be made between the two uses to determine the accurate business expense.