Mileage Deduction for Self-Employed

Updated April 2026 · 8 min read

Driving for business is one of the most under-claimed deductions among freelancers. The IRS lets you choose between a flat per-mile rate and tracking actual vehicle costs. For most freelancers, the standard mileage method wins — but only if you actually log the miles. This article covers the rules, the math, and how to track without losing your mind.

The 2026 standard mileage rate

The IRS sets one rate per year for business driving. For 2026, the rate is:

• $0.70/mile — business use
• $0.21/mile — medical or moving (active military only)
• $0.14/mile — charitable

Multiply your business miles by $0.70 to get your deduction. 5,000 business miles = $3,500 deduction.

What counts as a business mile

Business miles are driving from one work location to another. They include:

• Home → client meeting → home (if home is your principal place of business)
• Home → coworking space → home (if you regularly work there for that day)
• Driving between clients in a single day
• Trips for business supplies, banking, post office, networking events
• Conference travel (if driving rather than flying)

What does NOT count

• Commuting. Home → regular office → home. Even if "regular office" is once a week.
• Personal errands during a business trip (the personal portion only).
• Driving from your day job to your freelance side gig (commuting from one work location to another personal commute).

The "home is your principal place of business" rule is your best friend. If you have a qualifying home office (see our home office guide), every business trip starting from your home counts as a business mile from your driveway.

Method 1: Standard mileage

Track miles. Multiply by $0.70. Done.

Pros: simple math, no receipt-keeping, includes a built-in depreciation factor.
Cons: can't also deduct gas, oil, repairs, insurance, depreciation separately.

You can still deduct: parking fees, tolls, business-related interest on a vehicle loan (% used for business).

Method 2: Actual vehicle expenses

Track every cost: gas, oil changes, tires, repairs, insurance, registration, depreciation, lease payments. At year-end, multiply by the business-use % (business miles ÷ total miles).

Pros: can be much higher for high-cost vehicles (luxury cars, EVs with expensive batteries, frequent repairs).
Cons: requires keeping every receipt, plus a mileage log to compute business %.

Standard vs actual: the math

Most freelancers come out ahead with standard mileage. Here's why.

Example: Honda Civic, 8,000 business miles

• Standard: 8,000 × $0.70 = $5,600 deduction
• Actual: Total annual costs ~$7,000 (gas $2,000 + insurance $1,500 + depreciation $2,500 + maintenance $1,000). Business use = 8,000 / 12,000 total = 67%. $7,000 × 67% = $4,690 deduction

Standard wins by $910.

Example: Tesla Model Y, 8,000 business miles

• Standard: 8,000 × $0.70 = $5,600 deduction
• Actual: Total ~$11,000 (lease $9,600 + insurance $1,200 + electricity $200). Business use = 67%. $11,000 × 67% = $7,370 deduction

Actual wins by $1,770 for the EV — high lease costs make actual method shine for expensive vehicles.

The locked-in rule

If you start with the actual method on a given vehicle, you can switch to standard later. But if you start with standard, you must use the standard method for the life of that vehicle (with limited exceptions). For most freelancers buying a typical commuter car, start with standard — it's almost always better and gives you optionality.

How to log miles (audit-proof)

The IRS expects "contemporaneous" records — logged at or near the time of the drive, not reconstructed from memory. Three approaches:

1. App-based (recommended). MileIQ, Stride, Hurdlr, QuickBooks Self-Employed. They auto-detect drives via GPS, and you swipe each one as business or personal. ~$5-15/month, fully deductible.
2. Spreadsheet. Date, start odometer, end odometer, purpose. Tedious but free. Use whenever you take a business trip.
3. Calendar reconstruction. Backup method only — pull Google Calendar/Maps history at year-end. Less audit-proof but better than nothing.

Common mistakes

• Round-number estimates. "I drive about 10,000 business miles a year" without records won't survive an audit. Use actual logged miles.
• Forgetting parking and tolls. These deduct in addition to standard mileage. Save the parking app receipts and toll statements.
• Counting commute miles. Home → regular client site → home is commuting if you go there frequently. Variable client visits at different locations are usually safe.
• Mixing methods mid-year. Pick one method for the year and stick with it.

S-corp considerations

If you've elected S-corp taxation, the math changes. Your S-corp can reimburse you under an "accountable plan" at the standard rate — and the reimbursement is tax-free to you and deductible to the S-corp. This is more efficient than personal mileage deduction. Talk to a CPA before electing S-corp status.

The bottom line

Most freelancers leave $1,000-$3,000 on the table by not tracking miles. Install a mileage app today, swipe the drives at end-of-day for 5 minutes a week, and at year-end you'll have a defensible $0.70/mile deduction that costs you nothing extra to claim.