Worked example
Drive 4,000 business miles in each half of 2026 and your deduction is $2,900.00 plus $3,040.00, or $5,940.00. At a combined 30% tax rate that saves about $1,782.
The 2026 rates
| Period | Business rate |
|---|---|
| January 1 to June 30, 2026 | 72.5 cents a mile |
| July 1 to December 31, 2026 | 76 cents a mile |
The IRS normally sets one rate for the year. For 2026 it raised the business rate mid-year because vehicle costs rose. Miles driven before July use the old rate and later miles use the new one, so keep your log by date.
What counts as business mileage
- Driving from your office, including a qualifying home office, to clients, job sites or meetings.
- Trips to buy supplies, to the bank or post office for the business.
- Driving between two work locations in the same day.
Commuting from home to a regular place of work is not deductible. If your home office is your main place of business, trips from it to clients usually are.
Standard rate or actual costs?
You can deduct either the standard mileage rate or your actual costs (fuel, repairs, insurance, depreciation or lease payments) times the business-use share. The standard rate is simpler and often wins for efficient cars.
If you own the car, you must choose the standard rate in the first year you use it for business to keep the option later. For a leased car, you must use the standard rate for the whole lease once you pick it. Parking fees and tolls for business trips are deductible with either method.
Records the IRS expects
Log each trip with the date, start and end point or miles, and the business purpose. Write it down at the time or use a mileage app. A reconstructed log from memory is much weaker in an audit.
Common questions
What is the IRS mileage rate for 2026?
72.5 cents a mile for business driving from January 1 to June 30, 2026, and 76 cents a mile from July 1 to December 31, 2026.
Can W-2 employees deduct mileage?
Generally no. Unreimbursed employee expenses are not deductible on federal returns. The deduction is for the self-employed and some other groups.
How much does the mileage deduction save?
It reduces profit, so it saves both self-employment tax and income tax. For many freelancers that is 25 to 40 cents of tax for each dollar deducted.
Can I deduct mileage and gas?
Not both. The standard rate already covers fuel, maintenance and depreciation. You can add parking and tolls.
Official sources: IRS: Standard mileage rates, IRS: 2026 business mileage rate. This calculator gives estimates for planning, not tax advice. Read the disclaimer.