Business-Use Percentage: How to Calculate It and Why 50% Matters for Heavy EVs
General information, not tax or legal advice. Talk to your tax preparer about your situation.
For a car, business-use percentage is business miles divided by total miles for the year, taken from your mileage log. IRS Pub 946 says listed property must be used more than 50% for qualified business use to claim Section 179 or the special depreciation allowance, and a later drop to 50% or less can trigger recapture.
How to calculate it
For cars, business use is measured in miles: business miles ÷ total miles driven in the year (IRS Pub 946; Form 4562, Part V). Commuting is personal, not business (IRS Publication 463).
Example: 9,000 hypothetical business miles ÷ 12,000 total miles = 75% business use. Estimates, not tax advice.
Why more than 50% matters
Cars are listed property. Pub 946 says listed property must be used more than 50% for qualified business use in the year it's placed in service to claim the Section 179 deduction or the special depreciation allowance. At 50% or less, depreciation uses the alternative depreciation system (straight line).
If business use drops later
Pub 946 explains that if business use falls to 50% or less in a later year of the recovery period, you may have to recapture part of the depreciation claimed earlier, reporting it as income. That makes the yearly percentage, not just the first year's, worth watching.
Heavier EVs
The passenger-automobile depreciation caps generally apply to cars rated at 6,000 lb gross vehicle weight or less (Pub 946). Heavier SUVs rated above 6,000 lb and up to 14,000 lb aren't subject to those caps, but their Section 179 deduction is capped separately: $32,000 for tax years beginning in 2026 (Pub 946; Rev. Proc. 2025-32). Your vehicle's GVWR and use decide which rules apply; confirm with your preparer.
Keeping the percentage visible
Business-use percentage only holds up if the miles behind it are logged at or near the time (Pub 463). The dashboard shows your business-use percentage and warns you on the 28th if you're under 50%. VIN decode identifies your vehicle's GVWR class.
CyberDeduct builds a mileage log around IRS Pub 463 from your Tesla's own trip and odometer data. You connect your Tesla account once through Tesla's standard account sign-in (OAuth); CyberDeduct never sees or stores your password. You confirm each trip's purpose and export a PDF or CSV log plus a Form 4562 Part V worksheet for your tax preparer. See how the log is built or see plans.
Frequently asked questions
How is business-use percentage figured for a car?
Business miles divided by total miles for the year, from your mileage log (IRS Pub 946; Form 4562 Part V).
Do commuting miles count toward business use?
No. Commuting is personal (IRS Pub 463).
What happens if business use is 50% or less?
Section 179 and the special depreciation allowance aren't available for listed property, and the alternative depreciation system applies (Pub 946).
What if business use drops below 50% in a later year?
Part of the depreciation claimed earlier may have to be recaptured (Pub 946).
This article is general information, not tax or legal advice. Talk to your tax preparer about your situation.
CyberDeduct is an independent product of LIKE LLC and is not affiliated with or endorsed by Tesla, Inc. Tesla is a trademark of Tesla, Inc.