Buying a business vehicle belongs on Form 4562, form 4562, carried to schedule c line 13.
Why form 4562
A vehicle is an asset with a life longer than a year, so the purchase price is not a line 9 expense. You recover the cost through depreciation, bonus depreciation or a section 179 election computed on Form 4562, and the resulting deduction appears on Schedule C line 13. Only the business-use percentage is recoverable, and letting business use fall to half or less in a later year can trigger recapture of what you already claimed.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so buying a business vehicle lands on Line 4562 without you sorting it.
Start for freeWhat buying a business vehicle is confused with
- Line 9, car and truck expenses
- Running the vehicle, meaning gas, insurance, repairs, parking and tolls, is line 9; acquiring it is depreciation on Form 4562 carried to line 13.
- Line 20a, rent or lease of vehicles, machinery and equipment
- If the contract is a true lease you deduct rent on line 20a instead; if it is a conditional sale or lease-to-own you treat it as a purchase and depreciate it.
- Line 13, depreciation and section 179 expense deduction
- Form 4562 is the computation and line 13 is where the number lands, so the same cost never appears in both places.
Examples that belong on form 4562
- A $38,000 van bought and used entirely for a courier business
- A $52,000 pickup over 6,000 pounds gross vehicle weight used 90 percent for a trade
- A $24,000 used car in a rideshare business on actual expenses
- Converting a personal car to business use, with basis set at the lower of cost or fair market value on the conversion date
What does not belong here
- The purchase price entered on line 9
- The full price deducted on a car also used for personal driving
- Monthly finance payments treated as the deduction
- A section 179 election on a vehicle used 50 percent or less for business
The limit that applies
Passenger automobiles are subject to the section 280F depreciation limits, which the IRS publishes each year in a revenue procedure; some vehicles above 6,000 pounds gross vehicle weight fall outside those limits but have their own section 179 cap. Using actual expenses with depreciation in the first year also rules out the standard mileage rate for that vehicle for as long as you own it.
What to keep
Keep the purchase contract, the date placed in service, and the mileage records that set business use for every year you hold the vehicle. Part IV of Schedule C, or Form 4562, asks when the vehicle was placed in service.
Other expenses on form 4562
| Expense | Line |
|---|---|
| a new roof on a business building | Form 4562 |
| a used machine bought second hand | Form 4562 |
| a website build | Form 4562 |
| a work van or truck | Form 4562 |
| expensing or capitalising a purchase | Form 4562 |
| improvements to a rented studio | Form 4562 |
| legal fees to buy property or defend title | Form 4562 |
| sales tax paid on a capital asset | Form 4562 |
| workshop machinery such as a 3D printer | Form 4562 |
Related lookups
- Where does business mileage go on Schedule C?
- Where do car lease payments go on Schedule C?
- Where does capex go on Schedule C?
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so buying a business vehicle lands on Line 4562 without you sorting it.
Start for free