Mileage Deduction

If you drive your personal vehicle for business — traveling to job sites, picking up materials, meeting clients — you can deduct those miles on your taxes. The IRS gives you two options for calculating the deduction.

The standard mileage rate is the simplest approach. You multiply your total business miles by the IRS rate (which changes annually — it was 67 cents per mile in 2024). This rate is designed to cover gas, insurance, depreciation, maintenance, and repairs all in one number. You just need to track your miles.

The actual expense method requires you to track every vehicle-related cost — gas, oil changes, tires, repairs, insurance, registration, depreciation, loan interest, even car washes — and then multiply the total by your business-use percentage. If you drove 30,000 miles total and 20,000 were for business, that's 67% business use, and you can deduct 67% of your actual vehicle costs.

Important: commuting miles (home to your regular office) don't count. But driving from your home office to a job site does, and driving between job sites always counts.

For contractors, vehicle expenses are often one of the largest deductions available. You're constantly driving between job sites, supply houses, client meetings, and inspections. A contractor who drives 25,000 business miles per year at the standard rate is looking at a $16,750 deduction — that's real money off your tax bill.

The catch: you need a contemporaneous log. The IRS wants date, destination, business purpose, and miles for each trip. A mileage tracking app makes this painless. Without a log, you can't claim the deduction — even if you legitimately drove every one of those miles.