Mileage deduction calculator

2026 has two IRS business rates: 72.5¢ for miles driven January 1 through June 30, and 76¢ from July 1. A driver with 7,000 business miles in the first half and 8,000 in the second deducts $11,155: $5,075 at the first rate plus $6,080 at the second, a blended 74.4¢. At $75,000 of profit that deduction cuts federal tax by about $2,571. Pricing the whole year at 72.5¢ would understate it by $280.

The calculator splits your miles at July 1, adds parking and tolls, and then does the part most calculators skip: it runs your deduction through the 2026 tax engine to show the actual tax saved and what each mile is worth after tax. It also compares the standard rate with actual expenses and totals medical and charity miles.

Who reaches for this

The calculation has four steps. It multiplies each half-year’s business miles by that half’s rate and adds business parking and tolls, which are deductible on top of the standard rate. It then reduces your net profit by that deduction and runs the tax engine twice, once without the deduction and once with it, so the difference is the real change in your bill: self-employment tax, federal income tax, and state tax if you enter a rate. Finally it divides that saving by your business miles to give the after-tax value of one mile.

If you supply your actual vehicle costs and total miles for the year, it also computes the actual-expense deduction. Costs are multiplied by your business-use percentage, which is business miles divided by total miles. The comparison shows which method is larger, the annual cost level at which the two tie, and the depreciation basis reduction the standard rate will cause. The tax mechanics are the same ones explained on the 1099 tax calculator, so the numbers reconcile between the two pages.

The IRS allowance for mileage in 2026 has two figures for the same year. On December 29, 2025 the IRS set the business rate at 72.5 cents per mile, up 2.5 cents from 2025, and the medical and moving rate at 20.5 cents. On July 13, 2026, in Announcement 2026-11, it raised both for the rest of the year, citing higher fuel prices. The new rates apply to expenses paid or incurred on or after July 1.

Three details are worth knowing. The trip date governs, not the reimbursement date, so a June 28 client visit paid on July 10 is a 72.5-cent trip. The charitable rate did not move because Congress fixes it at 14 cents by statute. And the depreciation portion of the business rate stays at 35 cents per mile for all of 2026, up from 33 cents in 2025, which matters for vehicle basis, covered below.

The business rate comes from an annual IRS study of fixed and variable vehicle costs. The medical and moving rate covers variable costs only, which is why it is so much lower. All the rates apply to electric and hybrid vehicles as well as gasoline and diesel. Electric-vehicle owners often find the standard rate generous, because home charging costs far less per mile than the rate assumes.

Why a split year needs a split log

A return that uses the standard rate for 2026 needs two numbers: miles driven through June 30 and miles driven from July 1. A driver who logged 15,000 miles and priced them all at 72.5 cents would deduct $10,875 instead of $11,155, a $280 shortfall that is worth about $65 of tax at $75,000 of profit. It grows with the share of your driving that falls in the second half. Delivery and rideshare drivers who drive more in the holiday season gain most from the change.

The rate history

Here are the business, medical and charitable rates for each year back to 2015. Split years show one row per period. The 2027 rate has not been announced. The IRS normally publishes it in December.

Source: IRS mileage rate notices and announcements, 2015–2026. Feel free to cite or link directly to this table — calcority.com/mileage-deduction-calculator#rate-history — we keep it current as new rates are announced, typically each December and after any mid-year change.

A deduction is not a refund. Every dollar of mileage lowers your profit, and the tax saved is your combined marginal rate on that dollar. For a self-employed person that rate has two parts: 14.13% self-employment tax, because profit is what self-employment tax is charged on, and income tax at your bracket, reduced slightly because the QBI deduction shrinks when profit falls. That is why mileage is worth more than most people expect.

The table prices 1,000 business miles at the 76-cent rate, a $760 deduction, for a single filer with no other income. At the 22% bracket the saving jumps to $232, or 30.5% of the deduction. At $200,000 of profit the Social Security tax cap has been reached, which trims the self-employment part of the saving. Side income stacked on a salary is worth more: 1,000 miles saves $232 on $25,000 of profit that sits on top of a $60,000 salary, the same 30.5%, because the 1099 income is taxed in the 22% bracket.

Two conclusions follow. The first is a rule of thumb: every business mile at the 76-cent rate is worth roughly 16 to 23 cents in tax saved, depending on income. The second is a caution. A deduction always costs more than it saves. Driving an extra 1,000 miles to claim $760 of deduction spends far more than the $175 to $232 it returns. The point of logging is to claim the driving you already did.

What the July increase is worth

The rise from 72.5 to 76 cents is 3.5 cents on second-half miles. On 8,000 miles that is $280 of extra deduction and about $65 of tax at $75,000 of profit. The increase is a modest gain for most drivers, and a larger one for someone driving 30,000 miles a year, where 15,000 second-half miles is a $525 deduction and about $120 of tax.

You can deduct vehicle costs one of two ways. The standard method multiplies business miles by the IRS rate. The actual-expense method adds up what the car cost to own and run, then deducts the business-use percentage of it. The rules for choosing are stricter than most articles suggest, and one of them cannot be undone.

The rules that lock in your choice

Where the break-even sits

Standard beats actual when business miles × the rate is more than annual costs × business-use percentage. Take a driver with 20,000 total miles, 15,000 of them business (75%), split 7,000 and 8,000 across the two halves, so the standard deduction is $11,155. Her actual annual costs are $9,100: $3,000 of fuel, $1,700 of insurance, $1,300 of maintenance, $700 of tires and registration, and $2,400 of depreciation.

Her costs would have to run more than 60% higher, to about $14,900, before actual expenses tie. Standard wins by a wide margin for anyone driving many miles in a modest car, which describes most freelancers and gig drivers. Actual tends to win for low-mileage drivers with expensive vehicles, high insurance, or a large depreciation deduction.

The trade-off inside the standard rate

The standard rate carries a hidden cost: 35 cents of each business mile is treated as depreciation, so it lowers the car’s tax basis. For the 15,000-mile driver that is $5,250 of basis reduction in one year. When she sells or trades in the car, the taxable gain is measured from that lower basis, so a portion of the deduction comes back as income on sale. It is a timing difference, not a penalty, and usually a good bargain. It is still worth knowing when a vehicle has been run at the standard rate for many years.

When actual expenses win in year one

A large first-year deduction is the main reason to choose actual. Bonus depreciation is now 100% for qualified property acquired after January 19, 2025, and heavy vehicles, generally those rated over 6,000 pounds, are outside the annual passenger-car depreciation caps. Consider a hypothetical $58,000 heavy SUV placed in service this year, used 75% for business, with $9,000 of operating costs. The actual deduction in year one is ($58,000 + $9,000) × 75% = $50,250, against $11,155 under the standard rate. In year two only operating costs remain, $6,750, below the $11,155 the standard rate would give. Over two years the totals are $57,000 against $22,310.

The bonus deduction is real but comes with conditions. Business use must stay above 50% every year, or part of the depreciation is recaptured. Choosing actual and depreciation in year one permanently rules out the standard rate for that vehicle. A passenger car under the weight threshold faces annual caps, for example $20,200 in the first year for a 2025 car with bonus depreciation. And the sale of a vehicle depreciated to zero produces a gain. Model the decision with your preparer before you buy, not after.

What stays deductible either way

With the standard rate, business parking fees and tolls are deductible in addition to the per-mile amount, and so are the business share of car loan interest and personal property tax on the vehicle. Fuel, insurance, repairs, tires, registration and depreciation are inside the rate, so claiming them again would be a double deduction.

The deduction covers driving that serves your business and excludes driving between your home and your regular workplace. The line between them causes most of the errors on returns.

The home-office rule is the one that opens the most miles. If your home is your principal place of business, trips from home to clients, job sites and business errands are business miles from the first mile, because you are not commuting to a regular workplace. If you also rent an office, the office is your regular workplace and trips from home to it are commuting. The IRS uses the term tax home for your main place of business, and where it sits decides the answer.

Gig drivers and the gray zone

For rideshare and delivery drivers the miles from accepting a request through drop-off are business miles. Miles spent waiting or cruising with the app on between requests are a judgment call that turns on the facts, and there is no IRS rule written for it. Log those miles separately, in a different category, so you can decide with your preparer whether to claim them. Miles from home to the first pickup are the most exposed to a commuting challenge. Platform tax summaries often report only passenger-in-car miles, which undercounts what you drove. Your own log is the record.

The law requires adequate records or sufficient evidence to support your own statement, and for vehicles it demands more than for most expenses. For each trip the record has to show four things: the date, the miles, the destination, and the business purpose. A summary reconstructed at year-end is weak evidence. A log kept as trips happen is strong.

Apps that log by GPS produce timestamped records with little effort, and a paper log or spreadsheet works equally well when it is kept as you go. The free mileage log template has the columns above, applies the correct rate by date, and highlights business trips that have no purpose entered.

If your records are incomplete

IRS Publication 463 allows sampling. An adequate log kept for a portion of the year can support the full year if that portion is representative. Three well-documented months of typical driving, together with year-start and year-end odometer readings, can carry a return. It is not a substitute for a full log, but it is a way to recover when you started tracking late. Where records are lost to events outside your control, the rules also allow reasonable reconstruction from other evidence such as calendars, invoices and client emails.

Keep the log with your return for at least three years after you file. The mileage deduction is one of the items examiners ask about, and the log is the only proof of it. In a split-rate year, the date column matters twice: it supports the trip and it shows the rate.

Medical and charitable driving follow different rules from business driving, and neither goes on Schedule C. Both are itemized deductions on Schedule A, so they help only if your itemized total beats the standard deduction.

Medical miles are 20.5 cents January through June and 23.5 cents from July 1. They cover driving to receive medical care, such as trips to doctors, hospitals and pharmacies, and they count as a medical expense only above 7.5% of your adjusted gross income. With $60,000 of AGI, the first $4,500 of total medical expenses is not deductible. Driving 2,000 miles in each half of the year for treatment produces $880 of deductible medical mileage ($410 plus $470), which matters only when your other medical costs already push you past the floor.

Charitable miles are 14 cents, fixed by statute since 1997. Driving to serve a qualified charity, such as delivering meals or hauling supplies, is deductible at that rate, and 3,000 miles is $420. Driving to the charity’s office as a donor is not the same as driving in its service. The moving rate applies only to active-duty military members ordered to relocate, and, under recent law, certain members of the intelligence community.

Not on the federal return. The Tax Cuts and Jobs Act suspended the deduction for unreimbursed employee expenses starting in 2018, and the One Big Beautiful Bill Act made the suspension permanent. A W-2 employee who drives for work and is not reimbursed cannot deduct mileage federally, and cannot deduct the gap when an employer reimburses below the IRS rate.

A short list of workers keep a deduction, claimed on Form 2106: Armed Forces reservists who travel more than 100 miles from home, fee-basis state or local officials, certain performing artists, and employees with impairment-related work expenses. Several states have not followed the federal change. Alabama, Arkansas, California, Hawaii, Minnesota, New York and Pennsylvania allow a deduction on the state return, each with its own form and limits, and some sources add Maryland. Check your state before assuming either way.

The practical route: an accountable plan

For most employees the useful move is reimbursement. Under an accountable plan the employee substantiates each trip with the date, miles, destination and purpose, and the employer pays back at or below the IRS rate. Those payments are tax-free and never appear on the W-2. Amounts above the rate in force on the trip date are taxable wages, and a flat car allowance with no substantiation is fully taxable.

The mid-year change adds a wrinkle for employers. The 76-cent rate is tax-free only for travel on or after July 1. An employer that paid 76 cents on a March trip has paid 3.5 cents of taxable wages per mile. No federal law requires reimbursement at the IRS rate, or at all, but some states, California among them, require employers to reimburse necessary business expenses. A driver with a business-size mileage total who is told to “just deduct it” has been misinformed.

Self-employed filers deduct vehicle costs on Schedule C in the car and truck expenses line, and farmers use Schedule F. With the standard rate, the amount is business miles times the rate for each period. Business parking and tolls are claimed in addition to the mileage amount, following the form’s instructions.

Part IV of Schedule C asks for information about the vehicle: the date it was placed in service for business, and how many of the year’s miles were business, commuting and other. It also asks whether the vehicle is available for personal use and whether you have evidence to support the deduction. If you use actual expenses and claim depreciation, you also file Form 4562. Partners and S corporation shareholders generally claim vehicle costs through the entity’s return or an accountable plan, which is beyond what this page covers.

Mileage reduces net profit, which lowers self-employment tax, income tax, the QBI deduction, and the amount you must pay in during the year. If you plan to use it, build it into your quarterly payments through the quarterly estimated tax calculator, and check how it moves the annual bill with the self-employment tax calculator. If you are also weighing what to charge, the freelancer profitability calculator shows what vehicle costs do to your margin.

See how much tax your deductions leave you owing with the 1099 tax calculator, or compare a contractor rate against a salary with the employee vs. contractor calculator.