Indiana Mileage and Vehicle Tax Records (2026): Bonus and Section 179 Add-Backs, TNC Permits and INDOT on AVs
General information, not tax or legal advice. Talk to your tax preparer or attorney about your situation.
Indiana starts from federal adjusted gross income, so a self-employed driver's federal mileage deduction carries over. Indiana adds back bonus depreciation and any Section 179 expense figured with a ceiling above $25,000. Rideshare companies need a permit and keep trip records one year, and INDOT says Indiana law doesn't allow fully driverless vehicles.
Indiana has decoupled from federal bonus depreciation and higher Section 179 limits since 2002, so a new business vehicle often needs an Indiana adjustment. This guide covers what the Indiana Department of Revenue, the Indiana Code and INDOT say as of October 16, 2026.
The federal baseline every Indiana driver starts from
Most vehicle deductions begin on your federal return. If you're self-employed, you can generally use the standard mileage rate or actual expenses for the business share of your car (IRS Topic 510). For 2026 the business rate is 72.5¢ per mile for January 1 to June 30 (IR-2025-128 / Notice 2026-10) and 76¢ per mile for July 1 to December 31 (IR-2026-29 / Announcement 2026-11) (IRS standard mileage rates). EVs use the same rates; see the 2026 EV mileage rate guide. Most employees can't deduct unreimbursed car expenses federally (Topic 510). IRS Publication 463 asks for each business trip's miles, date, destination and purpose, plus total miles. Commuting stays personal (commuting vs business miles).
How Indiana treats vehicle deductions
The 2025 IT-40 instructions start the return with federal adjusted gross income on line 1, so a Schedule C vehicle deduction is already reflected. Adjustments go on Schedule 1 (add-backs) and Schedule 2 (deductions).
Depreciation: the two add-backs
Schedule 1, line 4 is the bonus depreciation add-back for property placed in service after September 11, 2001. The department's add-backs page says you figure your income as if bonus depreciation hadn't been used and add back the difference, which can be positive or negative. Line 5 is the Section 179 add-back. Indiana lets you figure Section 179 with a ceiling of no more than $25,000, so if you used a higher federal ceiling, you add back the difference.
Information Bulletin 118 (May 2026) says Indiana has largely decoupled from both since 2002. It also says Senate Enrolled Act 243 (2026) extended the decoupling to qualified production property under P.L. 119-21. The bulletin lists reporting codes 104 (bonus) and 105 (Section 179), and it explains that the federal and Indiana figures differ in later years and on sale. Keep both schedules. See robotaxi fleet depreciation and Section 179.
Rideshare (TNC) rules in Indiana
Under IC 8-2.1-19.1, a transportation network company may not operate in Indiana without a permit (section 1). Unless a written contract says otherwise, a driver who connects to the company's network is an independent contractor (section 4). Under section 16, the company keeps individual trip records at least one year from each trip, and driver records at least one year after the driver stops driving. Under section 18, the rider gets an electronic receipt with origin, destination, duration, distance and an itemized fare. Because the company only keeps trips one year, save your own. See which rideshare miles count.
Robotaxis and autonomous vehicles in Indiana
INDOT's connected and automated vehicles page says fully autonomous vehicles aren't commercially available and that Indiana law doesn't allow them to operate on Indiana roads. It also says House Bill 1341 (2018), an AV regulatory framework, failed to pass by its deadline, and that Indiana has no AV laws on the books. If you're planning a fleet, check with INDOT and an attorney. For fleet records, see robotaxi fleet tax basics.
What to keep in your Indiana records
- Each business trip's date, start, destination, purpose and miles, plus total miles for the year (Pub 463); a weekly log counts as timely kept.
- Separate Business, Commute and Personal totals for Form 4562 Part V.
- Keep records until the period of limitations runs out, generally 3 years federally (IRS); ask your preparer about the state period.
- If you claimed bonus depreciation or more than $25,000 of Section 179 federally: keep both depreciation schedules until the car is sold, since Indiana's figures differ in later years.
- For rideshare: download receipts and annual summaries at least yearly; the TNC only has to keep trip records one year.
For the full list of log fields, see what the IRS asks you to record.
Example: 1,000 hypothetical business miles driven in September 2026 × 76¢ (IR-2026-29) = $760 at the federal standard rate. Miles driven in March 2026 would use 72.5¢ (IR-2025-128) instead, so keep each trip's date. Estimates, not tax advice.
One log for both returns
An Indiana return doesn't call for a second mileage log; your preparer works from the same business, commuting and personal miles. CyberDeduct builds a mileage log around IRS Pub 463 from your Tesla's own trip and odometer data (Model S, 3, X, Y and Cybertruck). You connect your Tesla account once through Tesla's standard account sign-in (OAuth); CyberDeduct never sees or stores your password. Home/work rules and route templates label most trips Business, Commute or Personal; you tap to change any label and confirm the purpose. The dashboard shows your business-use percentage and warns you on the 28th if you're under 50%. You export a PDF or CSV log plus a Form 4562 Part V worksheet for your preparer. See how the log is built or see plans.
Sources (checked October 16, 2026)
- Indiana DOR, 2025 IT-40 instructions
- Indiana DOR, Information Bulletin 118
- Indiana DOR, Indiana add-backs
- IC 8-2.1-19.1 (2026)
- INDOT, Connected and automated vehicles
- IRS, Standard mileage rates; IRS Publication 463; IRS Topic 510
Frequently asked questions
Does Indiana use my federal mileage deduction?
Generally yes for the self-employed. The IT-40 starts from federal adjusted gross income, which already includes Schedule C vehicle expenses.
Does Indiana allow bonus depreciation?
No. You add back the difference on Schedule 1, line 4, figuring income as if bonus depreciation hadn't been used.
What is Indiana's Section 179 limit?
Indiana lets you figure Section 179 with a ceiling of no more than $25,000; you add back the difference on Schedule 1, line 5.
How long does an Indiana TNC keep trip records?
At least one year from the date of each trip (IC 8-2.1-19.1-16).
Are driverless cars legal in Indiana?
INDOT says Indiana law doesn't allow fully autonomous vehicles to operate on Indiana roads and that Indiana has no AV laws on the books.
This article is general information, not tax or legal advice. Talk to your tax preparer or attorney about your situation. State laws and bill status change; check the linked sources for the current text.
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.