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The mileage deduction, explained.
If you drive for your own business — freelancing, deliveries, rideshare, client work, a side hustle — the miles you drive are one of the most valuable deductions you have. They are also one of the most commonly disallowed, because people track them badly. Here is how it actually works.
Who can deduct miles
Self-employed people, independent contractors, and business owners can deduct business driving. If you are a W-2 employee, unreimbursed job mileage generally is not deductible on your federal return under current law — ask your employer about a reimbursement plan instead.
Two ways to calculate it
1. The standard mileage rate
Multiply your business miles by the IRS rate. One number covers gas, maintenance, insurance and depreciation. Watch for years with more than one rate — 2026 has two, because the IRS raised the business rate on 1 July. Split your log at that date and apply each rate to its own half; using a single rate for the whole year is wrong in both directions. One number covers gas, maintenance, insurance, and depreciation. Simple, and usually the better deal for fuel-efficient or paid-off cars. (The rate changes most years — verify the current figure at irs.gov.)
2. Actual expenses
Track every real cost — fuel, repairs, insurance, depreciation — and deduct the business-use percentage. More paperwork, sometimes a bigger deduction for expensive vehicles. Note: if you want the option to switch between methods later, the safe play is using the standard rate in the car's first business year.
| Period | Business | Medical / moving | Charitable |
|---|---|---|---|
| 1 January – 30 June 2026 | 72.5¢ | 20.5¢ | 14¢ |
| 1 July – 31 December 2026 | 76¢ | 23.5¢ | 14¢ |
Checked against the IRS on 2026-08-21. These figures cover driving up to 2026-12-31; for anything after that date, confirm the current rate at irs.gov — it has changed mid-year before.
What counts as a business mile
- Driving to meet clients or customers
- Trips between job sites or work locations
- Supply runs, bank deposits, post office trips for the business
- Driving to a temporary work location
The big exception: commuting. Driving from home to your regular workplace is personal, not business — no matter how far it is or what you listen to on the way. Mixing commute miles into a business log is the classic mistake that sinks the whole deduction in an audit.
The log the IRS expects
The IRS wants contemporaneous records — kept at or near the time you drive, not reconstructed in April. For each trip: the date, where you went, the business purpose, and the miles. Odometer readings at the start and end of the year anchor the whole log. A shoebox of gas receipts is not a mileage log; neither is a guess like "about 12,000 miles, mostly business."
This is exactly the record-keeping that automatic tracking solves: every drive logged with GPS as it happens, classified business or personal, with odometer photos and a clean export when tax season arrives.
This guide is general information, not tax advice. Rates and rules change; verify current figures at irs.gov and talk to a tax professional about your specific situation.
Every mile, logged before you park.
OdometerIQ detects your drives, sorts business from personal, and exports tax season as one PDF + CSV + photo bundle.
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