Mileage Deduction Calculator (2026)

Two rates in one tax year

2026 is unusual. The IRS set the business standard mileage rate at 72.5 cents in January, then raised it to 76 cents from 1 July through Announcement 2026-11, after petrol prices climbed roughly 38% over the first half of the year. The last time the agency made a mid-year adjustment was 2022. Calculators and spreadsheets that assume a single annual rate will get your deduction wrong in both directions — too low if they use 72.5 cents throughout, too high if they use 76.

Practically, this means your mileage log needs dates, not just totals. If you have been recording a single running figure, split it at 30 June as accurately as your records allow; a calendar, invoices or job records usually make the division reconstructible.

Standard rate or actual expenses?

The standard rate bundles fuel, insurance, maintenance, repairs and depreciation into one number, so you cannot deduct those separately on top of it. The alternative is the actual expense method: total what the vehicle genuinely cost you for the year and deduct your business-use percentage of it. Expensive vehicles, heavy repair years and low-mileage-but-high-cost situations tend to favour actual expenses; high-mileage drivers of ordinary cars almost always do better with the standard rate, and it requires far less paperwork.

One rule constrains the choice: if you want to use the standard rate for a car you own, you must use it in the first year that car is in service. You can switch to actual expenses later, but not the other way round. Leased vehicles must keep whichever method you started with for the whole lease.

What counts as a business mile

Travel between your home and a regular workplace is commuting and is never deductible. But once your home qualifies as your principal place of business — which it does for most freelancers with a legitimate home office — trips from home to a client site, a supplier, the bank or the post office become deductible business travel rather than commuting. This is why the home office deduction is often worth more than its own dollar value suggests: it changes the character of every trip you take.

Records matter more here than almost anywhere else in freelance tax, because mileage is the deduction most often disallowed for lack of evidence. The IRS expects a contemporaneous log with date, destination, business purpose and miles. An app that tracks trips automatically is the least painful solution; a notebook in the glovebox works equally well if you actually fill it in.

Why the deduction is worth more than your tax bracket

A business deduction reduces profit, and profit is the base for both income tax and self-employment tax. So each dollar deducted saves roughly 14 cents of self-employment tax before income tax is even considered — and then income tax at your marginal rate on what remains. For someone in the 22% bracket, a $6,693 mileage deduction is worth around $2,314 in total, not the $1,472 that the bracket alone would suggest.

Frequently asked questions