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Mileage Deduction in 2026 — Standard Rate vs. Actual Expenses

By How Much+ Editorial Team · Published 2026-02-14 · Last updated: 2026-02-14 · 7 min read

The IRS gives gig drivers two ways to deduct vehicle costs. The standard mileage rate is simpler; actual expenses can be larger. Here's how each works and how to pick the right one for your situation.

Parts of this article were drafted with AI assistance and reviewed by a human editor. This is general educational content, not personalized advice.

If you drive for Uber, Lyft, DoorDash, Instacart, Amazon Flex, or any other gig-economy platform, your vehicle is the single largest deductible expense in your business. Getting the deduction right can change your tax bill by thousands. The IRS gives you two methods to choose from, and you generally have to pick one — not both — for a given vehicle.

Method 1: The standard mileage rate

With this method, you simply multiply your total business miles by the IRS's per-mile rate for that year. The rate updates annually — always verify the current figure on the IRS standard mileage rates page before filing. Using last year's rate is one of the most common errors in gig-worker tax returns.

That per-mile figure is meant to cover gas, insurance, maintenance, repairs, depreciation, and tires — all bundled into one number. You cannot deduct those costs separately on top of the standard rate.

You can still deduct, on top of the standard rate:

• Parking fees and tolls incurred for business
• The business-use portion of your vehicle loan interest (for self-employed only)
• The business-use portion of state/local property taxes on the vehicle

Method 2: The actual expense method

With this method, you track every actual vehicle cost — gas, oil, repairs, insurance, registration, lease payments or depreciation, tires, car washes — and deduct the business-use percentage of the total.

Business-use percentage is calculated by dividing business miles by total miles driven in the year. So if you drove 30,000 miles total and 21,000 of them were for gig work, your business-use percentage is 70%, and you deduct 70% of every actual expense.

Which method gives you a bigger deduction?

It depends entirely on your vehicle and how you use it. Some general patterns:

• Standard rate often wins for: reliable older cars with low operating costs and high business miles.
• Actual expenses often wins for: newer or more expensive vehicles (high depreciation), heavy trucks, EVs with high upfront cost, vehicles with major repairs in the year.
• Pickups and SUVs over 6,000 lbs GVWR have additional depreciation rules (Section 179 / bonus depreciation) that can make the actual expense method dramatically more valuable in the first year. Talk to a CPA before buying a heavy vehicle for gig work.

The honest answer for most drivers: track both for one year and compare. After that you'll know which one your situation favors.

The "first year election" rule

If you want to use the standard mileage rate, you generally have to choose it in the first year you use the vehicle for business. If you use actual expenses in year one, you're locked into actual expenses for that vehicle going forward. (For leased vehicles, if you choose standard mileage, you must stick with it for the entire lease.) This is a trap that costs people money every year.

What the IRS expects you to have

For either method, the IRS requires contemporaneous records — written down at the time, not reconstructed at year-end. A compliant log includes:

• Date of each business trip
• Starting and ending location
• Business purpose
• Miles driven
• Total annual miles (driving you do non-business doesn't count, but the IRS expects you to know your odometer at start and end of year)

Apps that auto-log mileage (like Stride, MileIQ, or Hurdlr) are accepted. Memory is not. Audited drivers who can't produce a log routinely lose the entire deduction.

How How Much+ helps

Pro users with the GPS Auto Clock subscription get automatic shift logs that include start/end locations and elapsed time — useful as a corroborating record alongside a mileage app. The Receipt Scanner captures gas, repair, and car-wash receipts so you have the documentation if you go with the actual expense method.

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