Can You Claim Gas and Mileage on Your Taxes?

If you’re self-employed, yes: claiming gas and mileage on your taxes is allowed, and you pick one of two methods. For 2026 you can deduct 72.5 cents for every business mile you drive, or you can deduct the business-use share of what you actually spend on the vehicle (gas, insurance, repairs, depreciation, and the rest).¹ Most W-2 employees cannot deduct either one. The rest of this article walks through who qualifies, which miles count, how each method works, and what records you need.

Who Qualifies

Sole proprietors, freelancers, and independent contractors who report business income on Schedule C can deduct vehicle expenses. That covers rideshare drivers, contractors, consultants, and anyone else running their own operation. Farmers filing Schedule F qualify too.²

If you receive a W-2, you almost certainly can’t claim these costs. The Tax Cuts and Jobs Act eliminated the deduction for unreimbursed employee business expenses starting in 2018, and that change has been made permanent. Even if your employer requires you to use your own car and doesn’t reimburse you, there’s no federal deduction for you to take.³

A short list of employees is still eligible and files Form 2106: Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses. If you’re not one of those, Form 2106 isn’t available to you.³

Which Miles Count

The IRS treats commuting as a personal expense. Driving from your home to your regular place of work is not deductible, no matter how long the drive is or whether you take work calls along the way.⁴

Trips that do qualify include driving between job sites, going to see clients, visiting suppliers, and running to the bank to deposit business receipts. When a single trip mixes business and personal errands, only the business portion counts. A detour for groceries on the way back from a client meeting doesn’t get folded in.

Working From Home Changes the Math

If your home office is your principal place of business, drives from home to other work locations for that business are deductible business miles, not commuting. To qualify, you have to use the space exclusively and regularly for administrative or management activities, and you can’t have another fixed location where you do substantial administrative work.⁵

Temporary Work Sites

Travel to a temporary work location is also deductible. If you have a regular office and drive to a short-term project site instead, that round trip counts. If you don’t have a regular office and normally work within your metro area, travel to a temporary site outside that area qualifies as well.⁴

The Standard Mileage Rate

The simpler method is to multiply your business miles by the standard rate. For 2026 that rate is 72.5 cents per mile. A contractor who logs 8,000 business miles would claim $5,800. The rate is designed to cover gas, insurance, depreciation, repairs, and ordinary wear.¹

Because the rate already accounts for operating costs, you can’t add gas receipts or repair bills on top. Parking fees and tolls related to business travel are still deductible separately. Beyond that, the tracking burden is light: you’re mainly logging miles.

The IRS attaches conditions. You must pick the standard mileage rate in the first year the vehicle is available for business use. If you start with actual expenses, that vehicle is locked out of the standard rate permanently. You also can’t use the standard rate if you’ve claimed Section 179 expensing, MACRS depreciation, or bonus depreciation on the vehicle, or if you operate five or more vehicles at the same time.²

Going the other direction is easier. If you start with the standard mileage rate, you can switch to actual expenses in a later year, though you’ll have to use straight-line depreciation for the vehicle’s remaining useful life.

The Actual Expenses Method

The alternative is to track every dollar you spend on the vehicle and deduct the business share. Eligible costs include gasoline, oil changes, repairs, tires, insurance, registration fees, lease payments, and depreciation if you own the vehicle.³

Figure your business-use percentage by dividing business miles by total miles for the year. Drove 15,000 miles total with 9,000 for business? That’s 60%. Apply the percentage to your total vehicle costs. If those costs came to $8,000, your deduction is $4,800.⁴

Actual expenses tend to produce a bigger deduction when the vehicle is expensive to run, gas prices are high, or you’ve had a year with major repairs. Newer vehicles with steep depreciation also favor this method. The catch is paperwork: you need receipts for everything, not just a mileage log.

Records You Have to Keep

This is where deductions collapse under audit. The IRS expects a contemporaneous log, meaning you write trips down when they happen, not from memory in April. Each entry should show the date, destination, business purpose, and miles driven. If you use odometer readings, note the start and end.⁴

GPS-based mileage apps have made this much easier, and the logs they generate are generally accepted. If you use actual expenses, keep every receipt for gas, maintenance, insurance, and other vehicle costs. Organized digital copies are fine.

If the IRS disallows your deduction for lack of documentation, the resulting underpayment can carry an accuracy-related penalty of 20% on top of the extra tax owed. That penalty applies when the IRS finds you were negligent or disregarded the rules, and claiming a deduction you can’t substantiate fits.⁶

Keep records for at least three years from the date you file, or two years from the date you paid the tax, whichever is later.⁷

Where It Goes on Your Return

Sole proprietors report vehicle expenses on Schedule C (Form 1040). If you’re using the standard mileage rate, or your vehicle is fully depreciated, fill out Part IV of Schedule C, which asks for business miles, commuting miles, and other personal miles.⁸ If you’re using actual expenses with depreciation on a vehicle that isn’t fully depreciated, you may also need Form 4562.⁹

Schedule C includes a checkbox asking whether you have written evidence for your mileage claims. Answering no invites scrutiny. If you’ve kept a proper log, check yes and keep the log accessible.

Employees in the eligible categories (reservists, performing artists, fee-basis government officials, and employees with impairment-related work expenses) calculate their expenses on Form 2106 and carry the result to Schedule 1.³

One Thing to Know Before You Sell the Car

When you sell or trade in a vehicle you’ve been using for business, the IRS reclaims some of the tax benefit through depreciation recapture. Any gain on the sale, up to the depreciation you previously claimed, is taxed as ordinary income rather than at capital gains rates. Gain above that amount may qualify for capital gains treatment.¹⁰

This catches people who used the standard mileage rate and think depreciation never came into it. The IRS treats a portion of each year’s standard mileage deduction as depreciation, and that piece is still subject to recapture when you sell. The sale goes on Form 4797, with the calculation in Part III, and the recaptured amount flows to Schedule 1. Factor the tax hit in before you list the vehicle.

1
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents per Mile, Up 2.5 Cents
2
Internal Revenue Service. Topic No. 510, Business Use of Car
3
Internal Revenue Service. Instructions for Form 2106
4
Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
5
Internal Revenue Service. Publication 587 – Business Use of Your Home
6
Internal Revenue Service. Accuracy-Related Penalty
7
Internal Revenue Service. How Long Should I Keep Records
8
Internal Revenue Service. Schedule C (Form 1040) 2025
9
Internal Revenue Service. Instructions for Schedule C (Form 1040)
10
Internal Revenue Service. Instructions for Form 4797