The business mileage deduction lets you write off what it actually costs to drive your vehicle for work. The IRS gives you two different rates for deducting those business vehicle expenses in 2026, depending on when you drove: 72.5 cents a mile from January through June, then 76 cents a mile from July through December. That mid-year jump in the IRS business standard mileage rate is the first one since 2022. Freelancers, gig drivers, and anyone who pays self-employment tax should treat this deduction as real money, not a rounding error.
What Counts as Business Mileage
Business mileage is any driving you do in your vehicle for work that isn't your regular commute. Meeting a client, picking up supplies, making a bank deposit for your business, or shuttling between two job sites in the same day all count as business vehicle use. Your drive from home to the office you go to every day doesn't count, even if you take a work call the whole way there. The IRS treats that drive as a personal expense no matter how far it is or what you do during it.
One exception matters if you work from home. A qualifying home office makes your house your tax home for that business, and that flips every drive from home to a client's office, a supplier, or any other work stop from a commute into deductible business travel. Freelancers and small business owners who work out of a home office overlook this move more than any other one on this list.
Two Ways to Deduct Your Miles: Standard Rate or Actual Expenses
You have two methods for turning your business driving into a deductible mileage deduction, and you can't mix the two methods for the same vehicle in the same year.
The standard mileage rate multiplies your business miles by the IRS rate for the year. Track your miles, multiply by the rate, and you're done. Gas, repairs, insurance, and depreciation don't get deducted separately, because the rate already bakes those in.
The actual expense method has you add up what the vehicle really cost to operate: gas and oil, tires, repairs, maintenance, insurance, registration fees, and depreciation or lease payments. Then you deduct the business-use percentage of those vehicle expenses. Recordkeeping runs heavier than the standard mileage rate takes, but an expensive-to-run automobile or a high-mileage year can push the actual expense method to a bigger tax savings and a larger deductible total.
Timing is the catch. Choosing the standard mileage rate has to happen in the first year the vehicle is available for your business, or you lose the option to use that method for that vehicle ever again. Picking it in year one still leaves room to switch to the actual expense method in a later year if the math works out better. Starting with the actual expense method (and the vehicle depreciation that comes with it) generally locks you into that method for that car going forward.
Leased vehicles carry a stricter version of the same rule: choosing the standard mileage rate means using it for the entire lease term, including any renewal, with no switching away. Sole proprietors, freelancers, and LLC owners all follow the same rules here. IRS Publication 463 (Travel, Gift, and Car Expenses) is the source document covering the benefits and limits of both methods in full detail.
The 2026 Mileage Rates, Including the Mid-Year Increase
For 2026, the IRS business standard mileage rate is 72.5 cents per mile for driving from January 1 through June 30, then 76 cents per mile from July 1 through December 31. That change came in Announcement 2026-11, a rare mid-year adjustment the IRS hadn't made since 2022, to catch up with rising fuel costs. The standard mileage rates for the first half of the year were set back in December 2025 under Notice 2026-10. Most confusion about using the right rate comes down to one thing: which half of the year the trip happened in.
| Period | Business | Medical/Moving | Charitable |
|---|---|---|---|
| Jan 1 to Jun 30, 2026 | 72.5 cents/mile | 20.5 cents/mile | 14 cents/mile |
| Jul 1 to Dec 31, 2026 | 76 cents/mile | 23.5 cents/mile | 14 cents/mile |
Congress sets the charitable rate by statute instead of letting the IRS adjust it for inflation, which is why it stays flat. Match whichever business rate fits when you actually drove the miles, and keep the two halves of the year separate in your log when you total up your business mileage deduction. One flat rate can't cover miles you drove before July 1 and miles you drove after.
Medical and moving rates in that table aren't related to your business deduction, but they're worth knowing if you're calculating deductions for your whole household. Using your vehicle for medical care purposes, like trips to a doctor, dentist, or pharmacy, is what the medical mileage rate covers, and any taxpayer with deductible medical expenses above the itemized-deduction threshold can claim it. Moving mileage works differently and cannot be claimed by most taxpayers anymore. Tax law changes suspended the moving expense deduction for almost everyone, so today only active-duty military members moving under permanent-change-of-station orders, plus certain intelligence community members, can use it.
How to Calculate Your Business Mileage Deduction
Calculating your deduction is straightforward once you have your mileage log. Multiply your business miles from each rate period by that period's rate, then add the two totals together. Picture 4,000 business miles driven from January through June and 3,500 more from July through December:
- 4,000 miles × $0.725 = $2,900
- 3,500 miles × $0.76 = $2,660
- Total deduction: $5,560
Business parking fees and tolls go on top of that total, since the standard mileage rate doesn't cover them and they get deducted separately. Local transportation expenses like tolls and parking under $75 don't require a receipt, as long as you keep a written record of the amount, date, and business purpose. Anything at $75 or above needs the actual receipt.
The Mileage Log the IRS Actually Wants to See
Adequate records have to back up your business mileage deduction, and the IRS standard is a log kept as you go, not one rebuilt from memory in April. Every business trip needs four things on record:
- The date of the trip.
- Where you drove, meaning your starting point and destination.
- The business purpose of the trip.
- The miles driven or your odometer reading.
A mileage app that logs GPS trips automatically is the easiest way to keep this current. A notebook or spreadsheet works too, as long as it gets updated close to when you actually drove. Extra scrutiny follows mileage deductions because they're easy to inflate, and a log built from memory months later won't hold up if you're ever asked to show it.
Where to Claim the Deduction on Your Taxes
Self-employed filers report their business mileage deduction on Schedule C, line 9, car and truck expenses, alongside their other deductible business expenses. Part IV of that same form asks for the date you put the vehicle in service, plus your business, commuting, and other mileage totals for the year, so keep those numbers ready before you file. One business vehicle or a small fleet for a growing side hustle both get reported the same way.
W-2 employees who drive for work and don't get reimbursed by their employer face worse news. Tax law changes over the past several years permanently ended the itemized deduction for unreimbursed employee expenses, mileage included, so claiming it on a federal return generally isn't possible anymore. Asking your employer for a mileage reimbursement or an accountable plan is the better move. That money comes to you tax-free and costs the company less than a raise would.
None of this is personalized tax advice, just general guidance. Your mix of income, vehicle, and state rules can change the math, so run your specific numbers by a tax professional before you file.
Frequently Asked Questions
The Bottom Line
Lowering your tax bill when you drive for work rarely gets simpler than the business mileage deduction, but only if you track your miles as you go and use the right rate for when you drove them. Log every trip, split your miles across the two 2026 rate periods, and claim it on Schedule C if you're self-employed.
For more on the tax side of self-employment, see how self-employment tax works, what other 1099 tax deductions you can claim, how to pay quarterly estimated taxes, and how to price your freelance work so it actually covers what your business costs to run. More self-employed tax basics live in the Taxes category.