If you’re self-employed and drive for work, the business mileage deduction lets you write off 72.5 cents for every business mile in 2026, or the business-use share of your actual vehicle costs if you’d rather track receipts. You claim it on Schedule C, and it applies to driving between work locations, to clients, and on business errands. Your commute doesn’t count, and W-2 employees generally can’t take this deduction at all.
Who Can Claim It
The deduction is for sole proprietors, independent contractors, freelancers, and partners in a partnership who use a personal vehicle for business. If you file a Schedule C, report self-employment income, or receive a 1099, you’re in the right group. The costs have to be ordinary and necessary for your trade.1Internal Revenue Service. Publication 334 – Tax Guide for Small Business
W-2 employees cannot deduct unreimbursed business mileage on their federal return. The Tax Cuts and Jobs Act suspended that deduction starting in 2018, and the One Big Beautiful Bill Act made the elimination permanent. A narrow group of employees is still eligible: reserve component members of the Armed Forces, state or local government officials paid on a fee basis, and qualified performing artists. Educators received a separate carve-out under the new law. If none of those describe you and your employer doesn’t reimburse you, that cost stays out of pocket.2Internal Revenue Service. Notice 2026-10 – 2026 Standard Mileage Rates
What Driving Actually Counts
Driving from home to your regular workplace is a personal commute. It’s never deductible, no matter the distance.1Internal Revenue Service. Publication 334 – Tax Guide for Small Business Once your workday has started, driving between work locations, to see clients, meet vendors, pick up supplies, or reach a job site is business travel.
Your “tax home” is the entire city or general area where your main place of business sits, not necessarily where you live. Travel within that area for business qualifies, and so does travel to a temporary work location expected to last one year or less. Once an assignment is realistically expected to run past a year, it’s treated as indefinite and the trips there stop being deductible, even if you haven’t been going that long yet.3Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
The Home Office Wrinkle
If your home office qualifies as your principal place of business, trips from home to another work location in the same trade count as business travel rather than commuting.4Internal Revenue Service. Publication 587 – Business Use of Your Home A freelance consultant working out of a qualifying home office can deduct the drive to a client’s downtown office. A consultant who rents that downtown office instead can’t deduct the drive from home to it.
Personal errands don’t turn into business trips because you strung them onto a work drive. If you leave a client meeting and stop at the grocery store on the way home, only the client-to-store leg is business. The store-to-home leg is personal.
The Standard Mileage Rate Method
Multiply your business miles by the IRS rate. For 2026 that rate is 72.5 cents per mile, and it’s built to cover fuel, insurance, maintenance, repairs, and depreciation in one figure.2Internal Revenue Service. Notice 2026-10 – 2026 Standard Mileage Rates Drive 15,000 business miles and your deduction is $10,875.
Parking fees and tolls for business trips are deductible on top of the rate. They aren’t baked into the 72.5 cents.5Internal Revenue Service. Topic No. 510 – Business Use of Car
There’s a first-year rule you can’t undo. For a vehicle you own, you have to pick the standard mileage rate in the first year the vehicle is available for business use. Start with actual expenses instead and you’re locked out of the standard rate for that vehicle for good. Start with the standard rate and you keep flexibility: you can switch to actual expenses in a later year if that works out better. Leased vehicles are stricter. Pick the standard rate on a lease and you have to use it for the entire lease, renewals included.5Internal Revenue Service. Topic No. 510 – Business Use of Car
You cannot use the standard rate at all if you operate five or more vehicles at the same time (a fleet), if you claimed Section 179 or bonus depreciation on the vehicle, if you used MACRS or any depreciation method other than straight-line, or if you claimed actual expenses on a leased vehicle after 1997. The rate already includes a depreciation component (35 cents of the 72.5-cent 2026 rate), so combining it with accelerated depreciation would be double-dipping.3Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
The Actual Expenses Method
Track every dollar you spend on the vehicle and deduct the business share. Qualifying expenses include gas, oil changes, tires, insurance, registration fees, repairs, lease payments, and depreciation.3Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses If you financed the vehicle, the business portion of the auto loan interest is also deductible for self-employed filers.
To calculate, divide business miles by total miles for the year. That’s your business-use percentage. Drive 18,000 miles total with 12,000 for business and you’re at 66.7 percent. Apply that to your total vehicle expenses. If those ran $9,000, the deduction is $6,003.
Actual expenses tend to win for people with expensive vehicles, high insurance premiums, or heavy repair bills, and for anyone with a high business-use percentage where depreciation alone drives a large deduction. The trade-off is paperwork.
Depreciation Caps and Heavy Vehicles
Depreciation is usually the biggest piece of an actual-expenses deduction on a vehicle you own, but passenger vehicles are capped each year under Section 280F regardless of what the vehicle actually cost. For passenger vehicles placed in service in 2026 where bonus depreciation applies:
- Year 1: $20,300
- Year 2: $19,800
- Year 3: $11,900
- Each year after: $7,160
If bonus depreciation doesn’t apply, the first-year cap drops to $12,300. Later-year limits are unchanged.6Internal Revenue Service. Rev. Proc. 2026-15 – Depreciation Limitations for Passenger Automobiles The One Big Beautiful Bill Act restored 100 percent bonus depreciation permanently for qualified property acquired after January 19, 2025, which includes most business vehicles.
Vehicles with a gross vehicle weight rating above 6,000 pounds sit outside the passenger caps. Most full-size SUVs, pickup trucks, and cargo vans fall here. A heavy SUV used more than 50 percent for business can qualify for a Section 179 deduction of up to $32,000 in 2026. Vehicles over 14,000 pounds GVWR, like large box trucks, have no Section 179 cap and can potentially be written off entirely in the first year. Remember the trade-off: claim Section 179 or bonus depreciation on a vehicle and you permanently lose the standard mileage rate on it.3Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
Choosing Between the Two Methods
Most people default to the standard rate because it’s easier, and for many drivers it produces a comparable or better result. Still, run the numbers both ways in year one, because that first-year choice controls what you can do later.
The standard rate favors you when the vehicle is inexpensive, paid off, and you rack up a lot of business miles. Actual expenses favor you with a newer or pricier vehicle, high insurance or repair costs, or a recent purchase where first-year depreciation is meaningful.
If you start with the standard rate and later switch to actual expenses, there’s a catch: you must use straight-line depreciation for the vehicle’s remaining useful life rather than accelerated methods.5Internal Revenue Service. Topic No. 510 – Business Use of Car Starting with the standard rate preserves your ability to switch, but the depreciation you’re stuck with after switching may not be as generous as you’d hoped.
The Records the IRS Wants
This is where mileage deductions come apart in audits. The IRS wants contemporaneous records, meaning you log trips at or near the time they happen rather than reconstructing them in April. A weekly log is timely enough under IRS rules.3Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
Each trip needs four pieces of information: the date, the mileage, the destination, and the business purpose. You also need to record your odometer reading at the start and end of each tax year, which lets the IRS check that your claimed business percentage is plausible.3Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
The IRS doesn’t require a specific format. Paper logbooks, spreadsheets, and mileage-tracking apps all work, as long as the required information is there and the records were made in a timely way. GPS-based phone apps make consistency easier because trips log automatically. Whichever you use, make sure you can export the data.
Using actual expenses adds a receipts requirement: gas, insurance bills, repair invoices, registration fees, everything you plan to deduct. A dedicated folder throughout the year, physical or digital, saves you at tax time.
How to Report It on Your Return
Sole proprietors and single-member LLC owners report vehicle expenses on Line 9 of Schedule C (Form 1040).7Internal Revenue Service. 2025 Schedule C (Form 1040) Part IV of Schedule C asks for the supporting details: date you started using the vehicle for business, total miles, business miles, commuting miles, and whether you have written evidence for the deduction. If you’re using the standard rate, or actual expenses without depreciation, and don’t otherwise need Form 4562, Part IV of Schedule C is enough.8Internal Revenue Service. Instructions for Form 4562 (2025)
Claiming depreciation, Section 179, or bonus depreciation adds Form 4562. Part V of that form covers listed property, which includes passenger vehicles. Corporations report vehicle expenses on Form 1120, typically on Line 26 (Other deductions) with an attached statement, or spread across applicable lines like repairs or depreciation.9Internal Revenue Service. U.S. Corporation Income Tax Return
Keep your mileage logs, receipts, and supporting documents for at least three years after filing, which is the standard period during which the IRS can audit the return.10Internal Revenue Service. How Long Should I Keep Records
What Happens if Your Records Don’t Hold Up
If you’re audited and your records are inadequate, the entire mileage deduction can be disallowed. Not a partial haircut. An auditor who finds no contemporaneous log can throw out the deduction and recalculate your tax as if you never claimed it.
On top of the additional tax, the IRS can add an accuracy-related penalty of 20 percent on the underpayment. The penalty applies when the underpayment is due to negligence, defined as any failure to make a reasonable attempt to comply with the tax code.11Office of the Law Revision Counsel. 26 U.S. Code 6662 – Imposition of Accuracy-Related Penalty on Underpayments Claiming 20,000 business miles with no log qualifies. Interest runs on both the tax and the penalty from the original due date of the return. A running mileage log is tedious. It’s also cheap insurance against a penalty that can easily exceed the deduction it protects.