How to Calculate the Mileage Tax Deduction (2025–2026)
The IRS standard mileage rate is 72.5 cents per mile for 2026. Here is how to calculate your mileage deduction, when to use actual expenses instead, and how to track mileage to survive an audit.
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The mileage tax deduction allows self-employed workers to deduct business driving at the IRS standard mileage rate — 70 cents per mile for 2025 and 72.5 cents per mile for 2026. A freelancer who drives 10,000 business miles in 2026 deducts $7,250 from Schedule C income, saving approximately $2,175 in combined SE and income taxes. The key requirements are: the miles must be for a genuine business purpose, and you must keep a contemporaneous mileage log.
How to calculate the mileage tax deduction
- Track every business mile — record date, starting location, destination, business purpose, and miles at the time of the trip (not reconstructed later).
- Exclude commuting miles — miles from your home to a regular workplace are not deductible. Miles from a home office to a client site are deductible (home office is your regular place of business).
- Multiply by the IRS rate — total business miles × $0.70 (2025) or × $0.725 (2026) = your standard mileage deduction.
- Report on Schedule C, line 9 — if using the standard mileage rate, check the applicable box and enter the deduction amount.
Standard mileage rate vs actual expenses: which is better
You choose one method per vehicle. If you choose standard mileage in the first year, you can switch to actual in future years. If you use actual expenses in year one, you cannot switch to standard mileage for that vehicle.
| Factor | Standard mileage (72.5¢/mile 2026) | Actual expenses |
|---|---|---|
| Calculation | Miles × rate | (Gas + insurance + repairs + depreciation) × business % |
| Record keeping | Mileage log only | All receipts + mileage log for business % |
| Better for | Fuel-efficient cars, high-mileage drivers | Expensive, fuel-inefficient cars with high fixed costs |
| Flexibility | Can switch to actual next year | Locks you in for this vehicle's life |
| Depreciation | Built into the rate — no separate deduction | Claim separately (Section 179 or MACRS) |
For most freelancers driving a typical sedan, the standard mileage rate is simpler and often better. At 10,000 business miles, standard mileage gives $7,250 in deductions (2026 rate). A $25,000 car used 70% for business with $8,000/year operating costs: actual expenses = $8,000 × 0.70 = $5,600 — standard mileage wins. High-cost luxury or work trucks often favour actual expenses.
What counts as a deductible business mile
| Trip type | Deductible? | Notes |
|---|---|---|
| Driving to a client's office | Yes | Deductible whether or not you have a home office |
| Driving to pick up business supplies | Yes | Must be for business purposes |
| Driving to a networking event or conference | Yes | Business purpose; keep event documentation |
| Driving to the bank for business deposits | Yes | Separate trip for business; not combined with personal errands |
| Commuting from home to a regular office | No | Never deductible — even for self-employed |
| Driving from a home office to a client | Yes | Home office is your regular place of business — first/last trip is deductible |
| Personal errand while also running a business errand | Partial | Prorate; only the additional miles for the business portion are deductible |
| Driving a co-working space (not home office) | No for commute | Regular coworking commute is the same as commuting to an office |
Mileage log requirements: what the IRS expects
The IRS requires a contemporaneous mileage log — one recorded at or near the time of travel, not reconstructed from memory months later. Required elements for each business trip:
- Date of the trip
- Destination (address or name of business visited)
- Business purpose (e.g., "client meeting with [client name]," "supply pickup at [store]")
- Miles driven for that trip
- Odometer readings (beginning and end of year)
Apps that automatically track GPS and let you categorise trips (MileIQ, Everlance, TripLog) are the most audit-proof solution — they timestamp and geo-log every trip. A simple spreadsheet updated daily also works. The IRS does not accept "I drove approximately X miles" — specific records are required.
Additional deductions you can combine with standard mileage
When using the standard mileage rate, you cannot also deduct gas, insurance, or car maintenance — those are included in the 72.5¢/mile rate. However, you can deduct:
- Parking fees for business trips (not parking at your regular workplace)
- Tolls for business trips
- Business loan interest if you financed the vehicle for business use
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Authoritative sources
- IRS — Standard Mileage Rates — Official IRS page with current and historical standard mileage rates for business, medical, and charitable use. Updated annually, typically in December for the following year.
- IRS Publication 463 — Travel, Gift, and Car Expenses — The IRS's detailed guidance on the standard mileage vs actual expense choice, what records are required, and the specific rules for commuting exclusion.
Key takeaways
- The IRS standard mileage rate is 70¢/mile for 2025 and 72.5¢/mile for 2026. Multiply total business miles by the applicable rate to get your Schedule C deduction.
- Commuting miles (home to a regular workplace) are never deductible. Miles from a home office to any client or business destination are deductible — the home office is your regular place of business.
- Keep a contemporaneous mileage log for every business trip: date, destination, purpose, and miles. Apps like MileIQ or Everlance automate this with GPS tracking. Reconstructed logs are audit red flags.
- If you choose standard mileage in year one, you can switch to actual expenses later. If you use actual expenses in year one, you are locked in to that method for that vehicle.
- You can deduct tolls and parking fees on top of the standard mileage rate — they are not included in the per-mile rate and are separately deductible.
- Mileage deductions reduce your Schedule C net income, which reduces both SE tax (15.3%) and income tax. The tax savings are roughly 25–35% of the deduction amount for most freelancers. The complete freelance deductions guide covers all other Schedule C categories beyond vehicle use.
Frequently asked questions
What is the standard mileage rate for 2025 and 2026?
The IRS standard mileage rate for business use is 70 cents per mile (70¢/mile) for 2025 and 72.5 cents per mile (72.5¢/mile) for 2026. These rates are updated annually by the IRS. The rate is designed to cover all vehicle operating costs — gas, oil, repairs, insurance, and depreciation — so you cannot deduct these individually if using the standard rate.
What counts as a deductible business mile?
Deductible business miles include: driving to client meetings, job sites, or work locations other than your regular home office; picking up business supplies; attending business conferences or networking events; driving to the bank for business deposits. Commuting (home to a regular office) is never deductible. If you have a home office, miles from home to a client are deductible because your home office is your primary place of business.
Should I use standard mileage rate or actual expenses?
Standard mileage rate is simpler and usually better for fuel-efficient cars driving many miles. Actual expenses — tracking every dollar of gas, insurance, repairs, depreciation and multiplying by business-use percentage — is better for expensive vehicles with high fixed costs. You must choose standard mileage in the first year you use a vehicle for business to preserve the option of using it in future years.
How do I track mileage for a tax deduction?
Keep a contemporaneous mileage log: record date, starting location, destination, business purpose, and miles at the time of each trip. Apps like MileIQ, Everlance, or TripLog automatically track GPS and let you categorise trips. A spreadsheet updated daily also works. The IRS requires records kept "at or near the time of travel" — logs reconstructed from memory months later are treated skeptically in audits.
Can I deduct both mileage and car expenses?
No — you choose one method per vehicle per year. The standard mileage rate covers all vehicle costs (gas, insurance, maintenance, depreciation). The only items you can deduct in addition to the standard rate are tolls and parking fees for business trips, as the IRS treats these as separate costs not included in the per-mile rate.
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