What percentage of the vehicle can an employer deduct if used entirely for business purposes?

When a vehicle is used entirely for business purposes, the employer can deduct 100% of the vehicle's expenses on their tax return. This is in accordance with IRS guidelines for business vehicle deductions. Under these guidelines, costs associated with operating a vehicle—such as fuel, maintenance, insurance, and depreciation—can all be claimed in full if the vehicle is exclusively used for business activities. This is important for businesses as it allows for full recovery of the costs associated with the vehicle, minimizing the taxable income related to those expenses.

In contrast, vehicles that are used for both personal and business purposes may have different deduction limits, which could explain the other percentage options, as they reflect cases of partial use where only a portion of the expenses may be deductible. Hence, with 100% business use, the ability to deduct the full amount maximizes tax benefits for businesses.