How the standard mileage deduction works
The IRS sets a standard mileage rate each year (70¢/mile for 2025, per IRS Notice 2025-5). Multiply your qualifying business miles by that rate to get your deduction. You do not need to track individual vehicle expenses — the standard rate covers gas, oil, repairs, insurance, depreciation, and registration fees.
Tax savings estimate: your deduction reduces your taxable income. At a combined 25% federal and state marginal rate, a $8,400 deduction saves you $2,100 in taxes. The calculator multiplies your deduction by the combined rate you enter to estimate savings.
Standard mileage vs. actual expenses — when each wins
The standard mileage method is simpler: you need only a mileage log. The actual expenses method (gas + insurance + maintenance + depreciation, multiplied by your business-use percentage) can produce a larger deduction when your vehicle is expensive to run or you drive a lot of total miles with a high business-use percentage.
A rough rule of thumb: if your total annual vehicle costs per business mile exceed the standard rate, actual expenses is better. At 70¢/mile, that means a vehicle costing more than $0.70 per mile to operate — including depreciation — may be worth tracking individually. High-mileage drivers on fuel-efficient vehicles almost always come out ahead with the standard rate.
Important: if you use the actual expenses method in the first year you place a vehicle in service, you cannot switch to the standard mileage method in later years. You can always switch from standard to actual, but not the other way around after year one.
Worked example
A freelance consultant drives 12,000 business miles in a year out of 20,000 total miles, and has a combined marginal tax rate of 25%:
| Item | Value |
|---|---|
| Business miles | 12,000 |
| IRS standard rate (2025) | 70¢ per mile |
| Standard mileage deduction | $8,400 |
| Business use of vehicle | 60% (12,000 ÷ 20,000) |
| Estimated tax savings (25% rate) | $2,100 |
The same driver under the actual expenses method: if total vehicle costs are $9,000 for the year (gas, insurance, maintenance, depreciation), the deductible amount is $9,000 × 60% = $5,400 — less than the $8,400 standard deduction. In this case, the standard rate wins.
Assumptions and limitations
- Rate shown is the 2025 IRS rate (70¢/mile). The IRS announces the standard mileage rate for each calendar year in December. The 2026 rate has not yet been confirmed in this calculator — update the data file when IRS publishes Notice 2026-xx. Check IRS.gov/tax-professionals/standard-mileage-rates for the current year's rate.
- Commuting miles are not deductible. Driving from your home to a regular place of work is commuting. Business miles are those driven for a work purpose: client visits, job sites, supply runs, or travel between work locations. If you work from home, all trips originating from your home office may qualify.
- Mileage log is required. The IRS requires a contemporaneous written or digital record of: date, destination, business purpose, and miles. An app like MileIQ, Everlance, or a simple spreadsheet works. Reconstructed logs from memory are often disallowed in audits.
- Employees cannot use this deduction. The miscellaneous itemized deduction for unreimbursed employee business expenses was suspended through at least 2025 by the Tax Cuts and Jobs Act. This calculator is intended for self-employed workers, sole proprietors, and business owners who deduct vehicle expenses on Schedule C, Schedule E, or Form 2106 as a self-employed person.
- This calculator does not compute the actual expenses method, the Section 179 or MACRS deduction for vehicle depreciation, the luxury auto depreciation caps, or listed-property rules. Use the equipment lease vs. buy calculator if you are financing a vehicle and want to compare methods.
Frequently asked questions
- Can I deduct miles for driving to a client meeting from my home office?
- Yes. If you have a qualifying home office (your principal place of business), trips from your home to see clients, visit job sites, or pick up business supplies are deductible business miles. The key is that your home qualifies as a business location — see IRS Publication 587.
- Can I use the standard mileage rate for a leased vehicle?
- Yes, you can use the standard mileage rate for leased personal vehicles. However, you must use the standard rate for the entire lease period — you cannot switch to actual expenses once you start with standard mileage on a lease.
- What about electric vehicles?
- The standard mileage rate applies to electric vehicles the same as gas vehicles. You cannot also claim the EV charging costs separately — they are included in the standard rate. However, if you use actual expenses, you can deduct the electricity cost attributable to business use.
- How do I track miles accurately?
- The most reliable approach is an automatic tracking app (MileIQ, Everlance, TripLog) that uses your phone's GPS to log every trip. You then mark each trip as business or personal. A spreadsheet works too — log the date, destination, purpose, and odometer readings. The IRS requires the record to be made "at or near the time of the trip."
Sources
- IRS Notice 2025-5: Standard mileage rates for 2025 (accessed 2026-10-02)
- IRS, Standard mileage rates — current and prior years (accessed 2026-10-02)
- IRS Publication 463, Travel, Gift, and Car Expenses (accessed 2026-10-02)
- IRS Publication 535, Business Expenses — vehicle deduction methods (accessed 2026-10-02)