If you drive for work, those miles are money. The business mileage deduction lets freelancers and small businesses write off the cost of using a personal vehicle for work, and it adds up faster than most people expect. This guide covers how the deduction works, the current IRS rate, which trips qualify, and how to keep a record that holds up.
How the business mileage deduction works
The simplest way to deduct car costs is the standard mileage method: you multiply your business miles by a flat rate the IRS sets. Track the miles you drive for work across the year, multiply by the rate, and that total is your deduction. No fuel receipts, no depreciation math, just miles times a rate. It is the method most sole proprietors and freelancers use because it is easy to track and easy to defend.
The current IRS standard mileage rate
The IRS updates the rate periodically, and it raised the business rate mid-year in 2026 because of fuel prices. As of the second half of 2026 the rates are:
- Business: 76 cents per mile from July 1, 2026 (it was 72.5 cents for January 1 to June 30).
- Medical: 23.5 cents per mile (20.5 cents before July 1).
- Moving, active-duty armed forces: 23.5 cents per mile.
- Charitable: 14 cents per mile, a rate set by law.
Always confirm the current figure on the IRS standard mileage rates page before you file, since it can change. This guide is general information, not tax advice.
Standard mileage rate vs actual expenses
There are two ways to deduct vehicle costs for business. The standard mileage rate applies one flat rate per mile and is the easiest to track. The actual expense method adds up your real costs, gas, insurance, repairs, and depreciation, then deducts the business-use share. If you drive an expensive vehicle or rack up high running costs, the actual method can sometimes give a bigger deduction, so it is worth comparing once a year. Most freelancers stick with the standard rate for its simplicity.
Which trips count as business miles
Business miles are trips for work: driving to a client, a job site, the bank, the post office, or to pick up supplies. Your normal commute from home to a regular workplace does not count. Medical and charitable miles have their own lower rates and rules, and moving miles only apply to active-duty military moving on orders. When a trip is a mix of personal and business, only the business portion counts, so log it honestly.
How to keep a mileage log
The IRS expects a record if it ever asks you to back up the number, and a good log takes seconds per trip. For each drive, note the date, where you went, why, and the miles. A notebook in the glovebox works, a spreadsheet works, and a mileage app that logs trips automatically works best of all. The key is to record it as you go rather than trying to reconstruct a year of driving in April.
Do the math in seconds
Once you have your miles, our free mileage deduction calculator works out the deduction instantly. It comes pre-filled with the current IRS rate, and you can edit the rate for a company reimbursement policy or a prior tax year. Enter the miles, pick the purpose, and see the number.
From miles to a paid invoice
If the driving is reimbursable by a client, do not just deduct it, bill it. Add the mileage as a line item so it lands on the invoice and you get paid for it. When the job is done, our free invoice generator turns those line items into a professional invoice you can send in minutes, and Billbooks keeps your mileage, expenses, and invoices together so tax time is painless.