What is Mileage Deduction?
A tax deduction for the cost of using a personal vehicle for business purposes, calculated using a per-mile IRS rate.
Definition
The mileage deduction is a tax deduction available to self-employed individuals, freelancers, and independent contractors for the cost of using a personal vehicle (or one owned by your business) for business-related driving. Rather than itemizing every vehicle expense, the IRS allows taxpayers to multiply their total business miles by a standard mileage rate. This simplifies record-keeping while still providing a meaningful deduction for business vehicle use. The deduction applies to sole proprietors, partners in partnerships, and S-corporation shareholders who are employees of their own companies.
Current IRS Mileage Rates
The IRS publishes annual standard mileage rates for business, medical, and charitable driving. For 2024, the business mileage rate is 67 cents per mile. These rates are updated annually and reflect the average cost of operating a vehicle, including gas, insurance, maintenance, and depreciation. Note that the mileage deduction is only available for business driving — not commuting from home to a regular place of business. If you use your vehicle for a mix of business and personal purposes, you must track and deduct only the business-use portion.
Standard Mileage Rate vs. Actual Expense Method
There are two ways to deduct vehicle expenses for tax purposes: Standard Mileage Rate — multiply your business miles by the IRS rate (67 cents in 2024). You do not need to track individual expenses. This method is simpler but can only be used if you have not previously used the actual expense method for the same vehicle, or if you lease the vehicle (you must use the standard rate for the entire lease period). Actual Expense Method — track every vehicle expense (gas, oil, insurance, registration, repairs, depreciation or lease payments) and deduct the portion attributable to business use, calculated as a percentage of total miles driven. This method is more complex but can sometimes yield a larger deduction if your vehicle is fuel-inefficient or requires expensive maintenance.
What Qualifies as Business Miles
Business miles include all driving done as part of your self-employment activities: driving to meet clients, customers, or patients; traveling to job sites, vendor locations, or project sites; attending business conferences, seminars, or trade shows; picking up business supplies or equipment; and traveling for temporary work assignments away from your regular place of business. Personal miles — commuting from your home to your regular office, personal errands, and vacation driving — are not deductible. If you drive a hybrid route (e.g., stopping at a client on your way to a personal appointment), you must use a reasonable method to allocate the business portion.
Record-Keeping Requirements
The IRS requires you to keep contemporaneous records (records made at or near the time of the trip) documenting each business drive. A qualifying mileage log should include: the date of the trip; the destination (client name, address, or location); the business purpose of the trip; the number of miles driven; and the starting and ending odometer readings (or a map printout for variable routes). The log must be created at the time of the trip — a log created months later during tax preparation is considered weaker evidence. Mobile mileage tracking apps (such as Stride, MileIQ, or QuickBooks Self-Employed) can automate this process and automatically generate IRS-compliant mileage reports for your tax filing.