How it works
Business driving is deductible two ways, and this calculator compares them so you keep the larger. The standard mileage method multiplies your business miles by a flat per-mile rate — a 2026 planning estimate around 67 cents, with the IRS announcing the official figure each December. The actual-expense method totals everything the vehicle really cost you for the year — fuel, insurance, repairs and depreciation — then deducts the business share, worked out as business miles divided by total miles. Twelve thousand business miles at 67 cents is an $8,040 standard deduction; if your $9,000 of real costs against 15,000 total miles gives an 80% business share, the actual method returns $7,200, and the standard rate wins. The calculator shows both and picks the larger. One strategic rule outweighs the arithmetic: choose the standard rate in the first year a car is used for business and you keep both options open later, but choose actual expenses first and the standard rate is gone for that vehicle permanently. And remember that commuting from home to a regular workplace is never deductible — business miles start at your first work stop.
Formula
Standard = business miles x rate | Actual = total costs x (business / total miles)
Tips
- Pick the standard rate in year one and you keep both methods open later.
- Choosing actual expenses first locks you out of the standard rate for that vehicle.
- Commuting from home to a regular workplace is never deductible.
- The default rate is a planning estimate; the IRS announces the official rate each December.
- Log miles as you drive — a reconstructed log is the first thing an audit challenges.
Frequently asked questions
- How do I calculate the mileage deduction?
- Two ways. Standard: multiply business miles by the per-mile rate (a 2026 planning estimate around 67 cents). Actual: deduct the business share of your real vehicle costs, split by business over total miles. The calculator compares both and keeps the larger.
- What is the standard mileage rate?
- A flat per-mile amount the IRS sets each year to cover fuel, wear and depreciation in one figure — a 2026 planning estimate is around 67 cents per business mile. The official rate is announced each December, so confirm the current figure before filing.
- Standard mileage or actual expenses — which is better?
- Whichever is larger for your numbers. Standard favours efficient cars and high mileage; actual favours expensive vehicles or heavy repair years. Choose standard in the first year a car is used for business and you keep both options open; choose actual first and standard is gone for that vehicle.
- Is my commute deductible?
- No — driving from home to a regular workplace is commuting and never deductible, even if you take calls on the way. Business miles begin at your first work stop or client visit, and trips between work locations during the day count.
- Do I need a mileage log?
- Yes — a contemporaneous record of date, destination, purpose and miles for each business trip. It is the first thing an audit asks for, and a log reconstructed after the fact is far weaker. An app that tracks trips as you drive is the easiest way to keep one.