Write Off Your Car—Strategically: A Guide for Physicians

Today’s Micro-Business Tactic: Write Off Your Car—Strategically: A Guide for Physicians

Owning a Business Vehicle: One of the Most Underused Tax Hacks for Doctors

If you’re like I was early in my micro-business journey, you’ve probably never fully explored how to use your vehicle for legitimate tax savings. You use your car to drive to hospitals, locums gigs, conferences, medical director meetings, or even to work on your short-term rental. But are you writing off any of those miles?

As a physician operating a micro-corporation, you have access to powerful tax tools that the typical W-2 doctor doesn’t. One of the best: the vehicle deduction.

Let’s break down the two main deduction methods, when to use bonus depreciation, and whether leasing or buying is right for your business vehicle strategy.

1. Two Ways to Deduct Vehicle Expenses

If you’re using your car for business—think driving to consult gigs, patient visits, MedSpa collaborations, or coaching clients—you can deduct expenses using one of two IRS-approved methods:

A. Actual Expenses Method

You track and deduct all operating costs for the business portion of your vehicle use. That includes:

• Gas

• Oil changes

• Repairs & maintenance

• Tires

• Insurance

• Registration

• Lease payments

• Depreciation (if owned)

• Interest on your car loan (if self-employed)

🚨 Pro Tip: If your car is used for both business and personal purposes, only the percentage used for business can be deducted. That means you’ll need a mileage log to prove it.

B. Standard Mileage Rate Method

In 2025, the IRS allows you to deduct 70 cents per business mile. This method is easier—especially for physicians who don’t want to track every receipt.

This rate already accounts for depreciation, fuel, insurance, and maintenance.

🚨 Pro Tip: If you use this method, you can’t separately claim depreciation or actual costs.

Use an app like MileIQ to simplify tracking. I use this app, and love it!

2. Bonus Depreciation & Section 179: The Power Move for SUV and Truck Owners

This is where the big write-offs happen, if done right.

If you buy a vehicle over 6,000 pounds Gross Vehicle Weight Rating (GVWR) and use it for your micro-business, you can tap into bonus depreciation and Section 179.

A. Bonus Depreciation (Up to 100%)

If the vehicle is:

✅ Over 6,000 lbs GVWR

✅ Purchased (not leased)

✅ Used at least 50% for business

✅ Placed in service by December 31st...

...you can deduct up to 100% of the cost in the first year.

Example: Buy a $90,000 Range Rover used 100% for business in 2025. You can deduct the entire $90,000 from your taxable income that year under bonus depreciation.

Great news, the latest tax bill saved the phase out of bonus depreciation under section 179

• The OBBBA permanently restores 100% bonus depreciation for qualifying property

B. Section 179 Deduction

For 2025, Section 179 lets you deduct up to $31,300 for qualifying SUVs, vans, and trucks between 6,000–14,000 lbs GVWR.

You must:

✅ Use the vehicle over 50% for business

✅ Buy it new or used

✅ Not exceed certain income thresholds

Case Study: Dr. Lopez's GMC Yukon Write-Off Strategy in 2025

Profile: Dr. Lopez is a 1099 family medicine physician who runs her professional micro-corporation, Lopez Health Solutions, PLLC. She drives frequently between urgent care centers, a rural clinic where she consults, and various CME events. Her CPA has advised her that her driving meets the IRS test for being more than 50% business use.

Vehicle Purchase in 2025

• Vehicle: 2025 GMC Yukon

• Gross Vehicle Weight Rating (GVWR): 7,500 lbs (qualifies: over 6,000 lbs)

• Purchase Price: $50,000

• Business Use Percentage: 90%

• Date Placed in Service: July 2025

Section 179 Deduction

Under the 2025 limits, Dr. Lopez can deduct up to $31,300 under Section 179 for her qualifying SUV.

Since her Yukon is used 90% for business, her allowable Section 179 deduction is: $28,170

Bonus Depreciation

The remaining cost basis after Section 179 is:

$50,000 - $28,170 = $21,830

Thanks to bonus depreciation, available at 40% in 2025 but will go back to 100% in 2026, she can deduct 40% of the remaining amount:

$21,830 × 40% = $8,732 deduction

Total First-Year Deduction (2025)

Deduction Type Amount

Section 179. $28,170

Bonus Depreciation $8,732

Total Deduction $37,482

 Key Point: Section 179 bonus depreciation will be restored to 100% in 2026, so it may be worthwhile to wait for your purchase til 2026 to save more in taxes.

Tax Impact for Dr. Lopez

If Dr. Lopez earns $250,000 in net income from her micro-corporation and is in a combined federal/state marginal tax bracket of 35%, her tax savings from this strategy would be:

$37,482 × 35% = $13,101 saved in taxes in 2025

If she waits to purchase the vehicle in 2026 with 100% bonus depreciation:

Total Deduction is $50,000

$50,000 × 35% = $17,500 saved in taxes in 2026

Take Home Message

Make sure to use section 179 and bonus depreciation if you are purchasing a larger vehicle. And might consider delaying the purchase until 2026 to save even more in taxes. In our case study, Dr. Lopez would save $4399 in taxes by waiting to purchase her vehicle in 2026.

📥 Want an e-book guide on section 179? Download: Section 179 Deductions for Independent Physicians

3. Leasing vs. Buying: Which Makes Sense for You?

Leasing a Vehicle:

• Deduct lease payments proportionally to business use

• No depreciation deductions

• Can still use mileage method

Best for: Doctors who like driving new vehicles every 2–3 years and don’t need a big upfront deduction.

Buying a Vehicle:

• Eligible for bonus depreciation + Section 179

• Higher upfront deductions

• Better long-term tax savings

Best for: Physicians looking for major deductions in any given year and who plan to keep the vehicle for a while.

4. Keep Meticulous Records or Risk an Audit

The IRS loves vehicle deduction audits. Protect yourself with:

✅ A mileage logbook or app like MileIQ

✅ Receipts for gas, repairs, maintenance

✅ Copies of purchase or lease contracts

✅ Business/personal use ratio evidence

Want to go deeper on tracking? Read my blog: 👉 Find Freedom by Downshifting Your W-2 Job

💬 Lessons from the Field

“This week, one of my coaching clients discovered they were overpaying taxes by nearly $24,000 per year—all because they weren’t deducting their GMC Denali properly. They drove to four different rural clinics and one MedSpa partner site weekly, but their CPA had never walked them through Section 179 or bonus depreciation.

After a 30-minute strategy session, we set them up with a clean mileage log using MileIQ and a plan to purchase a qualifying SUV. That tax savings? It immediately funded their next business investment, a marketing upgrade for their micro-practice.”

Don’t let poor documentation or uninformed tax prep cost you. Your vehicle is a tool, and tools should work for you—not against you.

Tool of the Week

Tool of the Week: Section 179 Deductions for Independent Physicians “This downloadable guide simplifies Section 179 into real-world examples and decision frameworks for independent doctors. Learn what vehicles qualify, how to split personal vs. business use, and how to stack this with bonus depreciation.”

🔗 Download the Tool →

Free eBook to Deepen Your Strategy

Looking to optimize more of your business expenses—beyond just your car?

📗 The Ultimate List of Business Deductions For Independent Physicians

Inside, you'll find next-level tactics on using your micro-corp structure to create tax-efficient strategies that protect time, income, and wealth. Your vehicle is just the beginning.

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“Want personal guidance? Our 1:1 coaching and consultations help you execute faster and smarter.”

🔹 Book a Strategy Consultation Session →

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Whether you’re trying to determine if leasing or buying makes more sense, or need help implementing an expense tracking system that protects you during tax season, this is where the transformation happens.

BTW, please remember I not an attorney nor tax professional and our meetings are for your information purposes.

Key Takeaways for Physicians

✅ Deduct your vehicle costs using either actual expenses or mileage rate

✅ Buying a heavy SUV/truck can unlock massive upfront deductions

✅ Section 179 + Bonus Depreciation = stacked tax advantages

✅ Keep airtight records to avoid IRS headaches

✅ Leasing is flexible; buying gives better long-term tax benefits

✅ Consult a physician-savvy CPA for customized implementation

Final Thought

Your vehicle is more than transportation. It’s a tax strategy on wheels—but only if you set it up the right way.

I have personally used every option that I have described in this post from standard mileage on my self-owned vehicle, to leasing through my micro-corporation, to a section 179 with bonus depreciation purchase. They all work and are viable options if you regularly use a vehicle to fulfill your professional services.

In your micro-business journey, every deduction counts. When used wisely, writing off your car can free up cash flow, reduce taxable income, and empower you to reinvest in your future.

Don’t just drive—deduct.