Guide

Vehicle and mileage deduction: standard rate vs actual expenses

How to deduct business use of a vehicle: the 2026 standard mileage rates (72.5 and 76 cents), actual expense method, record-keeping requirements, and which method to choose.

For drivers, agents, trades and anyone who visits clients, the vehicle is the biggest deduction on the return. Get the method and the log right.

2026 standard mileage rate

72.5 cents per business mile from January 1 to June 30, 2026, and 76 cents from July 1 to December 31. Parking and tolls are deductible on top. Commuting to a regular workplace is never deductible.

Actual expenses

Fuel, insurance, repairs, registration, lease payments or depreciation, multiplied by the business-use percentage from your log. Wins for expensive or inefficient vehicles driven moderately. Once you use actual expenses with accelerated depreciation, you cannot switch back to standard mileage for that vehicle.

The log

Date, miles, destination, purpose. An app (Everlance, MileIQ, Driversnote) or a spreadsheet. The IRS disallows vehicle deductions without a log more than almost any other item.

Recording it

Standard mileage is a year-end figure from the log; upload the summary and it is recorded. Under actual expenses, categorize fuel, repairs and insurance as vehicle expenses during the year and apply the percentage at year end.

FAQ

Questions, answered

Can I deduct the car purchase?

Under actual expenses, through depreciation or Section 179 (with limits for passenger vehicles, higher for trucks over 6,000 lbs). Under standard mileage, depreciation is built into the rate.

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