How to Calculate Mileage For Taxes | The 2026 Update

Multiply your total qualified business miles by the current IRS standard mileage rate — 70 cents for 2025 and 72.5 cents for 2026.

The biggest surprise for most new freelancers or small business owners is how much of their driving doesn’t qualify for a tax deduction. Commuting to a regular office, for example, is almost always considered personal travel by the IRS. That misconception causes a lot of people to overestimate their deduction or miss out on miles they didn’t realize counted.

This article walks through the straightforward math behind the mileage deduction, the specific rates for 2025 and 2026, and what the IRS expects to see in your mileage log. Tax rules change, so checking the current rates each year is part of the process.

The Basic Calculation: Miles Times Rate

The calculation itself is simple arithmetic. Keep a running total of all the miles you drive for qualified business purposes during the tax year. Multiply that total by the standard mileage rate set by the IRS for that year.

For the 2026 tax year, the rate is 72.5 cents per mile. If you drove 12,000 qualified business miles in 2026, the math is 12,000 multiplied by 0.725. That comes to a potential deduction of $8,700. The 2025 rate is slightly lower at 70 cents per mile.

Keep in mind that this deduction reduces your taxable income, not your tax bill dollar-for-dollar. It is subtracted from your total income before the IRS applies your tax bracket.

Why Business, Medical, And Charitable Miles Are Different

The IRS applies different rates to different categories of driving. Business miles have the highest rate because they include the cost of operating the vehicle. Medical and charitable miles use much lower rates, and the rules for what qualifies in each category are distinct.

• Qualified Business Miles: Driving to meet a client, pick up supplies, or travel between work sites. Commuting from home to a regular office does not qualify as a business trip.
• Medical Miles: Trips for yourself or a dependent to receive medical care. The 2025 and 2026 rate for this category is 21 cents per mile.
• Moving Miles (Military Only): Active-duty military members moving under orders can deduct moving expenses at the 21 cent rate. This moved category does not apply to civilians.
• Charitable Miles: Driving for volunteer work for a qualified nonprofit. This rate is set by statute at 14 cents per mile and does not change annually like the business rate.

Mixing these categories up in your log is a common error. Keeping separate sections in your mileage log for business, medical, and charitable trips makes tax filing much smoother and prevents confusion during an audit.

A Real-World Example Of The Mileage Deduction

Let’s walk through a practical scenario for a self-employed graphic designer in 2025. She drives to client meetings, the supply store, and a co-working space. She does not commute to a fixed office location.

She tracks her trips carefully and logs 8,500 business miles for the year. She also drove 1,200 miles for medical appointments and 400 miles for volunteer work at a local shelter. Using the IRS rates, her total potential deduction is calculated by multiplying each category by its specific rate.

You can find the official rates on the 2025 business mileage rate page, which the IRS updates annually. Here is how the math breaks down across the categories for her situation:

Notice the charitable rate is the lowest, and the business miles make up the bulk of the deduction. This kind of breakdown is exactly what you would enter on your Schedule C or other tax forms when filing.

How To Build A Compliant Mileage Log

The IRS does not require a specific form, but it does require specific information for each trip. Tax professionals suggest keeping a log that meets these guidelines to avoid issues during an audit.

1. Record the Date and Time: The IRS wants to see that the trip occurred during the tax year. A simple date stamp on each entry is the baseline for compliance.
2. Note the Destination: Include the full address or at minimum the city and state of your destination. A general area is better than nothing for proving business purpose.
3. State the Business Purpose: Write a short phrase like “Client meeting with Acme Corp” or “Picking up office supplies.” This connects the trip directly to your business activities.
4. Log Odometer Readings: Record the starting and ending odometer reading for each trip. This provides a clear paper trail that matches your total mileage claims.
5. Calculate the Total Miles: Subtract the start from the end. Keep a running total so you do not have to add everything up at the end of the year.

If your business structure requires it, or if you plan to switch to the actual expenses method in the future, a more detailed log is better. Some people use a dedicated notebook, a spreadsheet, or a mileage tracking app.

Standard Mileage Vs. Actual Expenses

You have two main options for deducting vehicle costs. The standard mileage rate is simpler, but the actual expenses method may lead to a larger deduction depending on your vehicle and driving patterns. You can read a detailed comparison of the standard vs actual expenses method for freelancers, but a quick breakdown helps clarify the trade-offs.

The standard mileage rate bundles gas, maintenance, insurance, and depreciation into one per-mile figure. The actual expenses method requires you to track every single cost, including repairs, tires, and registration fees. Here is a side-by-side look:

Once you choose the standard method in the first year you use the car for business, you may be limited in switching to the actual method later. A CPA can help run the numbers both ways to see which option saves you more.

The Bottom Line

The mileage deduction calculation is straightforward: log your qualifying miles accurately throughout the year, then multiply them by the current IRS rate. The 2026 rate increase to 72.5 cents makes accurate tracking even more valuable for self-employed individuals and small business owners looking to lower their taxable income.

Whether the standard mileage method or actual expenses works best depends on your specific vehicle costs and driving patterns — a CPA or enrolled agent with a copy of your prior-year return can help you choose the right method for your situation before you file.