Is Mileage Tax Deductible?

Quick Answer: ✅ Yes — you can deduct business mileage at 70 cents per mile (2026 IRS standard rate) or deduct actual vehicle expenses. Either way, you need a mileage log.

The Short Answer

Every mile you drive for business purposes — client meetings, job sites, supply runs, bank trips, post office runs — is deductible. Your daily commute from home to your regular office is NOT deductible (that's personal). But if you work from home, every business drive counts because your home IS your office.

IRS Rules for Deducting Mileage

The IRS gives you two options:

Option 1: Standard Mileage Rate (Simpler)

• 2026 rate: 70 cents per mile (updated annually by IRS)
• Multiply business miles driven × $0.70
• Also deduct: parking fees and tolls (on top of mileage rate)
• Cannot deduct: gas, insurance, repairs, depreciation (those are baked into the rate)

Option 2: Actual Expense Method (Potentially Higher Deduction)

• Track all vehicle costs: gas, oil, repairs, tires, insurance, registration, depreciation, lease payments
• Calculate business-use percentage (business miles ÷ total miles)
• Deduct that percentage of total vehicle costs
• Better for: expensive vehicles, high maintenance costs, low personal use

Source: IRS Publication 463 — Travel, Gift, and Car Expenses

Key Rule: You Must Choose in Year 1

If you use the standard mileage rate in the first year you use a vehicle for business, you can switch to actual expenses later. But if you start with actual expenses, you generally can't switch to standard mileage for that vehicle. Choose wisely in year one.

How Much Can You Deduct?

Example — Standard Mileage:

You drive 15,000 business miles in 2026.

• 15,000 × $0.70 = $10,500 deduction
• Plus parking ($600) and tolls ($200) = $11,300 total

Example — Actual Expenses:

Total vehicle costs: $9,000/year. Business use: 60%.

• $9,000 × 60% = $5,400 deduction
• In this case, standard mileage wins by almost double.

General rule: Standard mileage usually wins for fuel-efficient cars with moderate costs. Actual expenses can win for trucks, vans, or vehicles with high depreciation.

How to Categorize in QuickBooks

• QBO Category: "Car and Truck Expenses" (under Expenses)
• Schedule C Line: Line 9 — Car and Truck Expenses
• Form: Form 4562 if claiming depreciation on actual method
• Sub-accounts to create:

- "Vehicle — Mileage" (if using standard rate)

- "Vehicle — Gas" (if using actual method)

- "Vehicle — Repairs & Maintenance"

- "Vehicle — Insurance"

- "Parking & Tolls" (deductible under either method)

What Counts as Business Mileage?

✅ Deductible:

• Driving to/from client meetings
• Driving between job sites
• Supply or equipment runs
• Bank, post office, or office supply store trips
• Driving to a conference or business event
• Driving to a second work location
• Driving from home office to any business destination

❌ Not Deductible:

• Commuting from home to your regular office/workplace
• Personal errands combined with business trips (only the business portion counts)
• Moving between home and a coworking space you use daily (this IS your commute)

⚠️ Special case — Home office:

If your home is your principal place of business (and you claim the home office deduction), then ALL drives from home to business destinations are deductible — even to a temporary work location. This is a huge benefit of the home office deduction.

Common Mistakes to Avoid

1. Not keeping a mileage log — The #1 reason mileage deductions get denied in audits. You need: date, destination, business purpose, and miles driven. Every trip. Apps like MileIQ, Everlance, or a simple spreadsheet work.
2. Deducting your commute — Home to office is personal. Always. Unless your home IS your office.
3. Double-dipping — If you use standard mileage, you can't also deduct gas, repairs, or insurance. It's one or the other.
4. Forgetting parking and tolls — These are deductible ON TOP of the standard mileage rate. Many people miss this.
5. Not tracking from January 1 — Start your mileage log on day one of the year. Reconstructing months of driving at tax time is a nightmare (and less defensible in an audit).

Record-Keeping Requirements

Mileage log must include (per trip):

• Date
• Starting location and destination
• Business purpose (brief: "client meeting with ABC Corp" or "supply run — Home Depot")
• Miles driven
• Odometer reading (beginning and end of year, at minimum)

Pro tip: Use an automatic mileage tracking app. MileIQ, Everlance, and Stride all run in the background and detect drives automatically. You just swipe to classify as business or personal.

Who Can Deduct Mileage?

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