Business driving can be claimed either at a set rate per mile or on the actual costs of running the vehicle, and the choice is harder to reverse than most people assume.
Whichever route you take, the claim rests on the same thing: a record of the journeys made, kept at the time. A figure estimated at the year end is the weakest evidence there is and is routinely challenged.
This covers what the standard rate is for and what it already includes, who can use it and who cannot, how the alternative works, and how to decide between them before the first year is over.
What Is the IRS Standard Mileage Rate?
The IRS standard mileage rate allows taxpayers to deduct a set cents-per-mile amount for qualifying vehicle use, instead of tracking every actual vehicle expense. The IRS adjusts rates annually (typically in December for the following year).
A figure estimated at the year end, or a round number repeated every week, is the weakest possible evidence and is routinely challenged. Record the date, the destination, the purpose and the distance at the time. An app does the same job as a notebook and is harder to forget.
Anu Gupta, CA, EA, B.Tech · LinkedIn2025 IRS Mileage Rates (Current)
| Purpose | 2025 Rate per Mile |
|---|---|
| Business use (self-employed, Schedule C) | 70 cents |
| Medical or moving (active-duty military only) | 21 cents |
| Charitable service | 14 cents (set by statute, rarely changes) |
How to Use the Standard Mileage Rate
- Keep a contemporaneous mileage log for every qualifying trip.
- Record: date, starting location, destination, business purpose, and miles driven.
- At year end, multiply total business miles by the applicable rate.
- Deduct on Schedule C (self-employed) or claim as an employee business expense where applicable.
Pro Tip: Apps like MileIQ, Everlance, or TripLog automatically track and log mileage via GPS. A mileage log is your primary defense if audited.
Who Can Use the Standard Mileage Rate?
You can use the standard mileage rate if:
- You own or lease the vehicle
- You did not use MACRS depreciation on the vehicle in a prior year
- You did not claim Section 179 expensing on the vehicle
- You do not operate a fleet of 5 or more vehicles simultaneously
When You Cannot Use Standard Mileage
- You used MACRS (accelerated depreciation) on the vehicle in any prior year
- You claimed a Section 179 deduction on the vehicle
- You operate 5 or more vehicles simultaneously (fleet operation)
Actual Expense Method: The Alternative
Instead of using the standard mileage rate, you can deduct actual vehicle expenses. These include:
- Fuel and oil
- Maintenance and repairs
- Insurance
- Registration fees
- Depreciation (MACRS or Section 179)
- Lease payments (if leased)
You then multiply total actual expenses by the business use percentage (business miles divided by total miles for the year).
Comparing Methods: Which Gives a Bigger Deduction?
Neither method is always better. Generally:
- Standard mileage is simpler and better for high-mileage, lower-cost vehicles
- Actual expense method can be better for expensive vehicles or low-mileage drivers with high costs
- In the first year you place a vehicle in service, you must choose. Once you use actual expenses, you generally cannot switch back.
Choosing an Approach Before the Year Starts
The decision between the two methods is made once per vehicle and is harder to revisit than most people assume, so it is worth a few minutes at the point a vehicle enters business use rather than at the return.
The simplified approach suits high mileage in an inexpensive vehicle: the record-keeping is a log rather than a file of receipts, and the arithmetic is trivial. The detailed approach suits an expensive vehicle, low business mileage, or a vehicle with unusually high running costs, because those are the cases where actual costs exceed what a flat figure produces.
What makes the decision awkward is that the restrictions on switching are not symmetrical, and a choice made in the first year can close off the alternative later. The practical approach is to estimate both for a typical year before deciding, and to keep enough records in the first year to compute either, since that is the year the choice is made.
- Estimate both methods for a realistic year before choosing, not after
- Keep a mileage log regardless of method, because business use has to be established either way
- Note that the restrictions on changing method differ by direction, so check before assuming the choice is open
- Revisit the comparison when the vehicle is replaced, since the new vehicle is a fresh decision
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Frequently Asked Questions
Can employees deduct business mileage?
The Tax Cuts and Jobs Act (TCJA, 2018-2025) suspended the miscellaneous itemized deduction for unreimbursed employee expenses. W-2 employees cannot deduct business mileage on their federal return through 2025. Some states still allow it. After 2025, the pre-TCJA rules may return.
Can I deduct mileage to and from my regular workplace?
No. Commuting miles (home to regular work location) are never deductible. Business mileage starts at your first business stop after home, or from your office to another business location.
What documentation does the IRS require for mileage deductions?
A contemporaneous mileage log: date, destination, business purpose, and miles for each trip. 'Contemporaneous' means recorded at or near the time of the trip, not reconstructed from memory at year-end.
What does an acceptable mileage record look like?
Contemporaneous and specific: the date, the destination, the business purpose and the distance, recorded at or near the time of the journey. A figure estimated at the year end, or a round number repeated every week, is the weakest possible evidence and is routinely challenged. An app that logs automatically is easier than a notebook and produces the same thing, which is a record made when the trip happened.
Can the method be changed from one year to the next?
Sometimes, and not always in both directions, which is why the choice in the first year an asset is used matters more than people expect. The rules restrict switching in certain circumstances, particularly where accelerated write-offs have already been claimed. Before changing approach, check the current instructions for the restrictions rather than assuming the choice is free each year.
Written by
Anu Gupta, CA, EA, B.Tech
Anu works with US businesses on tax and entity questions at Profitjets, from choosing a structure to the filings that follow it. She writes about the decisions owners make once and then live with for years. Connect on LinkedIn
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