IRS Standard Mileage Rate for Business Tax Deductions

If you’ve ever driven to a client meeting, a job site, the post office, or that one printer that’s “definitely open” (it wasn’t),
you’ve probably felt the sting of vehicle costs. The IRS standard mileage rate is the government’s way of saying,
“We know driving for business costs money… so let’s not make you calculate every drop of gas like you’re running a tiny petroleum refinery.”

In plain English: the IRS standard mileage rate lets eligible taxpayers deduct business driving by multiplying
business miles by a set cents-per-mile rateno shoebox of receipts required for every oil change. But (because taxes),
there are rules, exceptions, and a few potholes you’ll want to avoid.

What the IRS standard mileage rate is (and what it’s not)

The standard mileage rate is an optional method for calculating deductible vehicle expenses for business use. Instead of totaling
actual costs (fuel, maintenance, insurance, registration, depreciation, etc.), you use one IRS rate and multiply it by your
qualified business miles.

Important: the standard mileage rate is meant to cover the operating costs of the vehicle. That means you generally
can’t also deduct those same operating costs separately under the standard method. However, certain add-ons (like
business-related parking fees and tolls) are typically deductible in addition to the mileage rate.

2026 IRS standard mileage rates (the numbers you came for)

The IRS updates these rates annually. For 2026, the standard mileage rate for business driving is
72.5 cents per mile. For context, it was 70 cents in 2025 and 67 cents in 2024.

Note: The business rate is the headline for self-employed folks and business owners. The other rates exist too,
but they follow different deduction rules (and “moving” is limited to specific groups).

A quick word about depreciation (yes, even when you don’t “take depreciation”)

Here’s a sneaky but important detail: part of the business standard mileage rate is treated as depreciation.
For 2026, the depreciation component is 35 cents per business mile. This matters because it can reduce your
vehicle’s tax basis over time, which may affect the tax result if you later sell or dispose of the vehicle.

Who can use the business standard mileage rate?

The business standard mileage rate is commonly used by:

• Sole proprietors (Schedule C filers), including freelancers and gig workers
• Partners with deductible business travel (depending on how expenses are handled/reimbursed)
• Businesses reimbursing employees under an accountable plan
• Certain employees who can deduct unreimbursed travel as an adjustment to income under specific rules

W-2 employees: the big “mostly no,” with a few “sometimes” exceptions

For most W-2 employees, unreimbursed employee travel expenses aren’t deductible as an itemized deduction.
In other words: if your employer doesn’t reimburse you for mileage, you usually can’t deduct it on your federal return.
There are exceptions for certain categories (think reservists, qualified performing artists, fee-basis government officials),
and educator rules can also come into play.

Practical takeaway: if you’re a W-2 employee, your best “mileage strategy” is usually an
accountable plan reimbursement from your employer (so you’re not paying business costs with after-tax dollars).

What counts as business miles (and what doesn’t)

Business miles are miles driven for ordinary and necessary business purposes. Common examples:

• Driving from your office to a client meeting
• Driving between job sites in the same day
• Driving to pick up supplies, inventory, or business equipment
• Driving from a qualifying home office to business locations (clients, job sites, meetings)

The classic non-example: commuting. Driving from home to your main workplace is generally personal commuting,
even if you spend the whole drive thinking about work and practicing your “quarterly forecast face.”

Home office nuance (a legit tax plot twist)

If you have a qualifying home office as your principal place of business, trips from that home office to business locations
may count as business miles. Without a qualifying home office, that “home to first stop” drive can look a lot like commuting.
This is one of those areas where good documentation and correct classification matter.

How to calculate the standard mileage deduction (with real numbers)

The math is blessedly simple:

Deduction = Business miles × IRS standard mileage rate

Example 1: A freelancer with a normal year of driving

Let’s say you drive 12,000 business miles in 2026.

12,000 × $0.725 = $8,700 vehicle deduction (plus eligible business parking and tolls, if any).

Example 2: Mixed-use vehicle (business + personal)

Suppose you drove 18,000 total miles during the year, but only 7,500 were business.
Under the standard mileage method, you only count the 7,500 business miles.

7,500 × $0.725 = $5,437.50

Example 3: Don’t forget the “extras” that are often allowed

If you used the standard mileage rate and paid $380 in business parking and $120 in business tolls:

Mileage deduction + parking + tolls = $5,437.50 + $380 + $120 = $5,937.50

Standard mileage vs. actual expenses: which is better?

You can generally choose between two methods:

• Standard mileage rate: simple, predictable, log your miles, fewer receipts.
• Actual expenses: track real costs (gas, repairs, insurance, registration, depreciation/lease costs, etc.) and deduct the business-use percentage.

When the standard mileage rate tends to shine

• You drive a lot for business and want a straightforward deduction.
• Your actual expenses aren’t unusually high (or you don’t want to track them).
• You like clean records: a mileage log + a few add-on receipts beats a paper hurricane.

When actual expenses might win

• Your vehicle is expensive to operate (high insurance, pricey repairs, heavy maintenance).
• You have significant deductible costs and a high business-use percentage.
• You’re comfortable tracking receipts and allocating personal vs. business use.

The “best” method is the one that produces the larger legal deduction with records you can actually maintain.
Many taxpayers run both calculations and choose the better outcome (when allowed).

When you can’t use the standard mileage rate

The IRS limits who can use the business standard mileage rate. Common disqualifiers include situations where you:

• Use five or more cars at the same time (fleet operations)
• Claimed certain depreciation methods (for example, using MACRS or depreciation methods other than straight line)
• Claimed Section 179 on the vehicle
• Claimed special/bonus depreciation on the vehicle
• Claimed actual expenses for a leased vehicle after 1997 (in many situations)

Switching methods: a simple rule of thumb

For a vehicle you own, you generally need to choose the standard mileage method in the first year it’s available
for business use if you want the option to use it. Later, you may be able to switch from standard mileage to actual expenses.
But switching the other way (actual to standard) can be restricted.

For a vehicle you lease, if you choose the standard mileage rate, you typically must use it for the entire lease period
(including renewals). Translation: choose wisely, because leases don’t like indecision.

The mileage log: boring, powerful, and your best friend in an audit

The IRS doesn’t ask for a perfect diary of your vehicle’s feelingsjust solid proof. A good mileage log generally includes:

• Date of the trip
• Where you went (destination)
• Business purpose (the “why”)
• Miles driven (or start/end odometer readings)
• Total miles for the year (often supported by odometer readings)

You can use paper logs, spreadsheets, or mileage-tracking apps. The best system is the one you’ll actually use
consistentlybecause reconstructing mileage from memory in March is how legends are born… and not in a good way.

How long should you keep records?

Keep tax records long enough to support what you claim on your return. Many taxpayers keep mileage logs and related records
for at least a few years after filing, and longer if there are special circumstances. If you’re using a vehicle for multiple years
and depreciation/basis issues may matter, longer retention can be helpful.

Reimbursements: what business owners and employees should know

If you’re self-employed

Reimbursements usually aren’t a thing (you’re reimbursing yourself with… your own money), so your focus is picking the
deduction method and keeping records.

If you have employees (or you are one)

Many employers use mileage reimbursements as a practical way to cover employee business driving.
Under an accountable plan, properly documented reimbursements are typically not treated as taxable wages.
If reimbursements exceed what’s allowed under plan rules, the excess may become taxable.

For most employees, the key is getting reimbursed rather than hoping for a deduction that likely isn’t available.
If you fall into a special exception category, the paperwork and reporting can differso treat this as a “read carefully” zone.

Where to claim the mileage deduction on your tax return

Where you report your business mileage deduction depends on your situation:

• Sole proprietors: commonly reported on Schedule C as car and truck expenses (with additional vehicle information required).
• Other business entities: reported on the relevant business return (partnership, S corp, C corp) according to entity rules.
• Qualified employees under exceptions: often involve additional forms and may appear as an adjustment to income, not an itemized deduction.

The big idea: the IRS doesn’t just want the numberit wants the story behind the number. Your log is the story.

Common mistakes that shrink (or sink) the deduction

• Counting commuting as business mileage (the IRS is not sentimental about your morning traffic heroism)
• No business purpose recorded (“Drove somewhere” is not a business purpose)
• Mixing methods improperly (standard mileage and actual expenses for the same vehicle/year is a no-go)
• Forgetting parking and tolls that may be deductible in addition to standard mileage
• Not tracking total miles (especially important for mixed-use vehicles)
• Choosing standard mileage after disqualifying depreciation (Section 179/bonus depreciation can shut that door)

FAQ: quick answers to common mileage deduction questions

Does the standard mileage rate apply to electric vehicles?

Yes. The business standard mileage rate applies to eligible vehicles regardless of whether they’re gas, diesel, hybrid, or fully electric.
The IRS rate is designed to reflect overall operating costs, not just fuel.

Can I deduct both standard mileage and gas?

Not for the same vehicle in the same year under the standard mileage method. The per-mile rate is meant to cover operating costs,
including fuel. Double-dipping is one of the IRS’s least favorite hobbies.

Can rideshare or delivery drivers use the standard mileage rate?

Many can, as long as they meet the standard mileage eligibility rules. This method is popular with gig workers because it’s simple
and mileage can be high. But if you’ve claimed certain depreciation methods or have a fleet situation, check the restrictions carefully.

What if I use multiple vehicles?

Multiple vehicles can be fine. The major red flag is using five or more cars at the same time in a way that counts as fleet operations,
which can disqualify standard mileage. Alternating vehicles at different times is treated differently than simultaneous business use.

Do I need an app to track miles?

No, but an app can reduce errors and save time. A paper log works tooif you actually use it. The IRS cares about credible,
timely records, not whether your log has Bluetooth.

Conclusion

The IRS standard mileage rate is one of the simplest ways to calculate a business vehicle deduction: track your
qualified business miles, multiply by the yearly rate, and keep documentation that makes sense to a human auditor who drinks coffee.
For 2026, that business rate is 72.5 cents per mile, and it can add up fast.

The winning move is consistency: log trips as you go, separate commuting from business driving, and understand the rules before you
mix in depreciation choices. And if you’re a W-2 employee, focus on reimbursements unless you clearly fall into one of the limited
exception categories.

SEO tags (meta title, meta description, sapo, keywords) are provided at the end of this article in JSON format.

Real-World Experiences and Lessons Learned (500+ Words)

In the real world, the mileage deduction is rarely about “math difficulty” and almost always about “life difficulty.”
The rate is easy. People are complicated. Calendars are chaos. Cars are hungry. And mileage logs? Mileage logs are the vegetables of
small-business nutrition: you know you should, you swear you will, and then suddenly it’s March and you’re trying to remember how
often you visited that client who only communicates via voice memo and vibes.

One common experience for freelancers and gig workers is the “week one optimism, week twelve amnesia” pattern. The first week of the year,
tracking feels clean and righteous: every trip gets logged, every stop has a purpose, and you feel like a responsible adult who owns matching
socks. Then the work picks up, you do three errands in one run, you get interrupted by a phone call, and your log entry becomes
“Drove around. Business happened.” The fix isn’t perfectionit’s creating a habit that’s hard to break. Many people find it easier to log trips
immediately after parking (before emails and life attack), or to set a weekly “mileage housekeeping” reminder.

Another real-world lesson: business mileage often hides inside “mixed trips.” For example, you drive across town to buy shipping supplies,
swing by a client location to drop paperwork, and then stop for groceries because you’re a human who eats food. The business portion may still
be deductible, but you need to separate business miles from personal miles in a way that’s reasonable and documented. People who do well here
usually pick a consistent approachlike logging each business stop as its own segmentrather than trying to justify the entire loop as “work.”
The IRS isn’t allergic to mixed-use driving; it’s allergic to sloppy substantiation.

Small business owners with employees often learn a different lesson: reimbursements can be as important as deductions. An accountable plan
reimbursement strategy can keep employees happier and can keep reimbursements from turning into taxable wages when handled correctly.
In practice, the challenge is building a simple policy: what qualifies, what documentation is required, how quickly employees must submit logs,
and what happens when documentation is missing. Businesses that keep it short and clear (think one page, not a novel) tend to get better
compliance and fewer year-end surprises.

There’s also the “depreciation surprise” experience. Many taxpayers assume the standard mileage rate has nothing to do with depreciation,
because they never typed the word “depreciation” into their tax software. But the IRS treats part of each standard-rate mile as depreciation
anyway, which can reduce basis over time. The practical implication often shows up later, when someone sells a vehicle and wonders why the tax
result isn’t as simple as “sold it for less than I paid, so I’m done.” The lesson here is not fearit’s awareness. Keep basic vehicle purchase and
disposition records, especially if you expect to use the same vehicle for multiple years.

Finally, one of the most common “I wish someone told me” moments involves commuting. People naturally want their largest recurring drive to be
deductible, and for many, that’s the daily trip to a primary workplace. But commuting generally isn’t business mileage. The folks who avoid trouble
are the ones who design their workflow around clear rules: track true business trips, understand home office requirements if they apply, and avoid
creative interpretations that sound good in your head but not on paper.

Bottom line: the standard mileage rate can be a powerful business tax deduction tool, but the real advantage comes from running your recordkeeping
like you run your businesssteady, repeatable, and not dependent on “future you” having a perfect memory.