Standard Mileage Rate
The standard mileage rate is the per-mile figure the IRS lets you deduct for business driving in a personal vehicle instead of tracking actual costs; for 2026 it's 72.5 cents a mile.
You get two ways to write off a vehicle you use for business, and you pick one. The standard mileage method is just business miles times the IRS rate: at 72.5 cents for 2026, every 1,000 miles is $725 off your taxable income. The actual-expense method instead totals what the car really costs you, gas, insurance, repairs, depreciation, lease payments, registration, then prorates that by your business-use percentage.
The first-year choice matters more than people expect. If you want the freedom to switch between the two methods in later years, you have to start with the standard rate in the first year you put the car in service. Lead with actual expenses on a vehicle you own and you're generally locked into actual expenses for that car's life. For pricey vehicles that burn through depreciation, actual expenses often wins anyway, run both numbers before you commit.
None of it survives an audit without a log. The IRS wants a contemporaneous record, written down at or near the time of the trip, showing date, destination, business purpose, and miles. A spreadsheet you reconstruct in April from memory is the kind of thing that gets a deduction thrown out. MileIQ, Everlance, and similar apps track this off your phone's GPS so you're not relying on recall.
Watch the commuting line, because it trips up almost everyone. Driving from home to your regular office is personal, full stop, and never deductible no matter how far it is. But if you have a qualifying home office, the trip from there to a client or job site counts as business mileage, which can turn an otherwise-personal drive into a real deduction. The distinction is where the miles begin.
One more practical note for the self-employed: business mileage reduces both your income tax and your self-employment tax, so the real value of each deductible mile is higher than your income-tax bracket alone suggests. That's why a few thousand logged miles can be worth more in tax savings than clients assume when they shrug off keeping records.
Practical Example
A self-employed real estate agent drives 18,000 business miles in 2026. At the 72.5-cent rate, that's a $13,050 deduction (18,000 x $0.725). Because the income is self-employment income, the write-off cuts both income tax and SE tax. Stacking a 24% income-tax bracket on the 15.3% SE rate is a quick way to size it up, and that back-of-envelope math points to roughly $5,100. The true number is a bit lower, because SE tax only hits 92.35% of net earnings and half of it is itself deductible, so the realistic combined federal saving lands closer to $4,800. Either way, that's well over four figures of tax saved on miles she was driving anyway, which is why the mileage log is worth the trouble.