Compare IRS standard mileage rate to actual vehicle expense method for your business miles.
Larger deduction
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Standard mileage
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Actual expense
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Two ways to write off a business vehicle
The IRS gives self employed drivers a choice for deducting a car used for work. The standard mileage method lets you multiply your business miles by a single rate, $0.70 per mile in this tool's 2026 estimate, and skip the receipts. The actual expense method adds up everything the car costs you for the year, gas, maintenance, insurance, and depreciation, then deducts the share that matches your business use. Both methods land on Schedule C for a sole proprietor. This calculator runs them side by side so you can see which produces the bigger deduction for your situation before you commit.
The business use percentage is the hinge of the whole comparison. It is your business miles divided by your total miles, and under the actual method it scales every dollar of car expense. Drive 70 percent of your miles for work and you deduct 70 percent of your gas, insurance, and depreciation. The standard method bakes all of that into one rate, which is why it is so much simpler to track.
Where the standard rate pulls ahead
As a rule of thumb, the standard rate wins for fuel efficient and inexpensive cars with high business mileage, because $0.70 a mile adds up faster than the modest real costs of running a Civic or a hybrid. The actual method tends to win for expensive vehicles, heavy SUVs, or older cars with steep maintenance and depreciation, where the real costs outrun the per mile rate. A leased luxury car driven mostly for work often deducts more under actual. The only way to know for your numbers is to run both, which is what this page does.
12,000 business miles, both methods
Picture a consultant who drove 14,000 business miles out of 20,000 total, a 70 percent business use share. Their car cost $4,500 in gas and maintenance, $1,600 in insurance, and $3,200 in depreciation for the year. The standard method gives 14,000 times $0.70, which is $9,800. The actual method takes the $9,300 of total costs and applies the 70 percent business share, which is $6,510. Here the standard rate wins by $3,290.
| Calculation | Result |
|---|---|
| Business miles times $0.70 (standard) | $9,800 |
| Total car costs ($4,500 plus $1,600 plus $3,200) | $9,300 |
| Business use share (14,000 of 20,000) | 70% |
| Actual deduction ($9,300 times 70%) | $6,510 |
| Larger method, by | Standard, $3,290 more |
The chart contrasts the two deductions for this driver.
The lock-in rule that traps actual-method filers
Here is the trap that costs people the most. In the first year you use a car for business, you can pick either method. But the choice has a one way door. If you start with the standard mileage rate, you can switch to actual in a later year. If you start with actual and claim depreciation, you generally cannot switch back to the standard rate for that vehicle, because the standard rate has a built in depreciation component that the IRS will not let you double count. For that reason I usually tell new business owners to begin with the standard rate in year one. It keeps your options open, and you can move to actual later if the car becomes expensive to run.
Whichever method you choose, the deduction collapses on audit without a contemporaneous mileage log. You need the date, the miles, and the business purpose of each trip. Apps that track this automatically are worth the few dollars a month. Depreciation under the actual method runs through Form 4562, and a reconstructed log built the night before an audit rarely survives scrutiny.
Are parking and tolls deductible on top of the standard rate?
Yes. Business parking fees and tolls are deductible separately and are not folded into the standard mileage rate. The rate covers the operating and ownership costs of the vehicle itself, gas, wear, depreciation, and insurance, but a parking garage receipt for a client meeting or a highway toll on a business trip is an additional deduction under either method. Keep those receipts and add them to your Schedule C separately.
Can a W-2 employee deduct mileage anymore?
Generally no. Unreimbursed employee business expenses, including commuting and work mileage for most employees, were suspended for tax years after 2017. This tool is built for the self employed, gig workers, and small business owners who report on Schedule C. If you are an employee, the better route is an accountable reimbursement plan through your employer, where the company pays you back tax free at the standard rate.