Employee

• You may be able to claim a tax deduction for employee business expenses if you used your vehicle for business purposes and were not reimbursed by your employer. You'll have to keep a written record of the number of miles you drove for business purposes, the number of commuting miles, and the number of miles for all other purposes. You can determine your mileage tax deduction by multiplying the total number of business miles driven by the standard mileage rate. The standard mileage rate may be adjusted from time to time. The rate for the 2011 tax year was 51 cents per mile, according to the Internal Revenue Service. Keep a record of any business-related parking fees and tolls. You can add these fees to the amount of your standard mileage deduction.
  
  

Employee Reporting

• You must itemize your deductions to claim any mileage and toll deductions as an employee business expense. You must figure this deduction on IRS Form 2106, Employee Business Expenses, and report the results on Schedule A of IRS Form 1040. Employee business expenses are subject to the 2 percent rule. You may deduct only the amount of your total miscellaneous itemized deductions that exceed 2 percent of your adjusted gross income.
  
  

Business

• You can deduct any business mileage and tolls on Schedule C of IRS Form 1040 that were incurred as part of operating your own business, and you can deduct those expenses regardless of whether you choose to itemize your deductions or claim the standard deduction. You still have to keep a written record of your mileage. Just like employee business expenses, the mileage tax deduction is determined by multiplying the total number of business miles driven by the standard mileage rate. Be sure to a record of all business-related parking fees and tolls. You can add these fees to the amount of your standard mileage deduction.
  
  

Considerations

• Commuting miles are never tax-deductible. Vehicle expenses that were reimbursed are not deductible either. You can elect to claim the standard mileage rate, or you may claim a deduction for actual expenses, but you may not claim both or any combination of the two. You must use the standard mileage rate method during the first year you claim a deduction for the vehicle in order to use the standard mileage rate in subsequent years. If you start out using actual expenses, you'll have to use actual expenses for the life of the vehicle.