How the mileage deduction works in 2026
Sarah York, EASarah is an Enrolled Agent with the IRS and a former staff writer at Keeper. In 2022, she was named one of CPA Practice Advisor’s 20 Under 40 Top Influencers in the field of accounting. Her work has been featured in Business Insider, Money Under 30, Best Life, GOBankingRates, and Shopify. Sarah has spent nearly a decade in public accounting and has extensive experience offering strategic tax planning at the state and federal levels. Her clients have come from a wide range of industries, including oil and gas, manufacturing, real estate, wholesale and retail, finance, and ecommerce, and she has handled tax returns for C corps, S corps, partnerships, nonprofits, and sole proprietorships. In her spare time, she is a devoted cat mom and enjoys hiking, painting, and overwatering her houseplants.
Krislyn ChanKrislyn is Chief Growth Officer at Keeper. At Keeper, she strives to make expert-level tax strategies that used to require a traditional CPA accessible to all. Prior to Keeper, she was at Curology, where she helped bring custom, prescription-grade skincare out of the dermatologist's office to millions of faces.
Key takeaways
- The IRS raised the 2026 business rate mid-year: 72.5¢ per mile through June 30 and 76¢ per mile from July 1. For 2025 it was 70¢.
- Your deduction is your business miles times the rate for when you drove them, plus business parking and tolls.
- The rate replaces your car costs. You can’t also deduct gas, repairs, or insurance. Deducting actual expenses instead can be worth more for pricier cars or lower mileage.
- Your first-year choice matters: if you deduct actual expenses for a car you own in its first year of business use, you can’t switch to the standard mileage rate for that car later.
- Commuting doesn’t count, and you need a mileage log to back up your deduction. The Keeper app can track your miles and other expenses automatically.
How to calculate your mileage deduction
Multiply your business miles by the IRS rate. Because the 2026 rate changed on July 1, split your 2026 miles into the two halves of the year:
| Business miles | Rate | Deduction |
|---|---|---|
| 6,000 (January–June) | 72.5¢ | $4,350 |
| 4,000 (July–December) | 76¢ | $3,040 |
| 10,000 total | $7,390 |
Add business parking fees and tolls on top. If you’re self-employed, you can also add the business share of your car loan interest and personal property tax on the car. The calculator does this split for you.
Standard mileage vs. actual expenses
Instead of the mileage rate, you can deduct the business share of what your car actually costs: gas, insurance, repairs, tires, registration, and depreciation or lease payments. Enter your costs under “Break down my expenses” in the calculator to compare the two.
- Standard mileage usually wins if you drive a lot of business miles in an affordable, fuel-efficient car. It’s also less work: you only need a mileage log.
- Actual expenses can win with a more expensive car, high insurance or repair costs, or fewer miles. You need receipts for everything, plus your total miles to find your business-use percentage.
The rules for switching
- Owned car: use the mileage rate in the first year you use the car for business, and you can switch to actual expenses later. Use actual expenses in the first year, and you can’t switch to the mileage rate for that car.
- Leased car: whichever method you choose, you use it for the whole lease, including renewals.
- You can’t use the mileage rate if you run five or more cars at once, or if you’ve claimed accelerated depreciation, bonus depreciation, or Section 179 on the car.
For more on how to choose the right method for your situation, see our full mileage vs. actual expenses guide and how car depreciation works.
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Try it freeWhat counts as business miles
Business miles are drives for your work: to meet clients, between job sites, to pick up supplies, or to deliver orders. If you drive for a gig app, miles driven between pickups and deliveries count. Driving from home to your regular workplace is commuting, which isn’t deductible. See business miles vs. commuting miles.
Keep a mileage log
The IRS expects a record made at or near the time of each drive: the date, where you went, why, and how many miles, plus your odometer readings and total miles for the year. Use our free mileage log template, or let an app track drives automatically. See how to track miles for taxes.
Who can deduct mileage
- Self-employed, freelancers, and 1099 contractors deduct business mileage on Schedule C, which lowers both income tax and self-employment tax.
- W-2 employees generally can’t deduct unreimbursed work mileage on their federal return. If your employer reimburses you at or below the IRS rate under an accountable plan, that reimbursement isn’t taxed.
- Anyone who itemizes can include medical miles in medical expenses and charity miles in charitable gifts.
Past IRS mileage rates
| Tax year | Business rate per mile |
|---|---|
| 2026 | 72.5¢ (Jan–Jun), 76¢ (Jul–Dec) |
| 2025 | 70¢ |
| 2024 | 67¢ |
| 2023 | 65.5¢ |
| 2022 | 58.5¢ (Jan–Jun), 62.5¢ (Jul–Dec) |
| 2021 | 56¢ |
Use the rate for the year, and the part of the year, when you drove the miles.
6 sources
- IRS: Standard mileage rates · irs.gov
- IRS: 2026 business standard mileage rate set at 72.5 cents per mile · irs.gov
- Announcement 2026-11 (mid-year 2026 rate increase), IRB 2026-29 · irs.gov
- Publication 463, Travel, gift, and car expenses · irs.gov
- Topic no. 510, Business use of car · irs.gov
- Rev. Proc. 2026-15: 2026 depreciation limits for passenger automobiles · irs.gov
This article is for informational purposes only and isn’t tax, legal, or financial advice. Tax rules change and depend on your situation, so talk to a tax professional about yours.
