Calculate IRS mileage deductions and reimbursements for business driving
Used to calculate business use %
For standard vs. actual comparison
The IRS requires a contemporaneous mileage log: date, destination, business purpose, and miles for each trip. Apps like MileIQ or Everlance can automate this. Without a log, your deduction is at risk in an audit.
The IRS updates its standard mileage rate annually to reflect changes in fuel costs and vehicle operating expenses. The business mileage rate is the one that matters most for self-employed contractors and freelancers — it covers the cost of operating your vehicle for business purposes including gas, maintenance, insurance, and depreciation, all in a single per-mile deduction.
You have two choices for deducting vehicle costs: the standard mileage rate (simple — just track miles) or the actual expense method (complex — track every gas receipt, maintenance bill, insurance payment, and depreciation). The actual method can yield a higher deduction if your vehicle is expensive to operate, but it requires meticulous record-keeping. You must choose a method in the first year you use the vehicle for business, and there are limitations on switching.
The IRS requires a mileage log that records: the date of each trip, the destination, the business purpose, and the number of miles. This must be maintained contemporaneously — meaning you record it at the time of the trip, not reconstructed at tax time. Many contractors use a mileage-tracking app that auto-logs trips using GPS.
If you travel overnight for work, you may be able to deduct meals and lodging at the IRS per diem rate rather than tracking actual receipts. This simplifies record-keeping for contractors who work in multiple locations. The per diem rate varies by city — higher rates apply to expensive markets like New York and San Francisco.
Can I deduct mileage for driving to a job site?
Yes — driving from your home or office to a client's job site is deductible business mileage. However, commuting from home to a regular, fixed work location (like a shop or office you own) is generally not deductible. If you work from a qualified home office, all business driving from home can be deductible.
How do I track mileage accurately?
The most reliable method is a mileage-tracking app (MileIQ, Everlance, TripLog) that uses your phone's GPS to automatically log trips. You then classify each trip as business or personal. This creates the contemporaneous log the IRS requires and eliminates the risk of reconstructing miles from memory at tax time.
What is the 2025 IRS mileage rate?
The estimated 2025 IRS standard mileage rate for business driving is $0.70 per mile. The IRS typically announces the official rate in December for the following year. The rate for medical and moving purposes is $0.21/mile, and for charitable driving it is $0.14/mile.
Can employees deduct unreimbursed mileage?
As of 2018, employees can no longer deduct unreimbursed business expenses including mileage on their federal tax return (the Tax Cuts and Jobs Act suspended the miscellaneous itemized deduction). However, self-employed individuals and independent contractors can still deduct business mileage on Schedule C.
Is mileage reimbursement taxable income?
If your employer reimburses you at or below the IRS standard rate and you provide a proper mileage log, the reimbursement is not taxable income. Reimbursements above the IRS rate are taxable. For self-employed individuals, mileage is a business deduction, not reimbursement income.
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