deductions

By Jason Mercer · Updated May 31, 2026 · Figures verified 2026-05-31

Self-Employed Mileage Deduction (2026)

If you drive for your business, you can deduct it — and for 2026 the standard mileage rate is 72.5¢ per business mile. You choose between two methods (standard rate or actual costs), and either way you need a mileage log to back it up. Because the deduction reduces your net profit, it lowers both your income tax and your self-employment tax.

The 2026 standard mileage rate

The IRS sets a per-mile rate each year that bundles together gas, insurance, maintenance, depreciation, and wear. For 2026 it’s 72.5¢ per mile driven for business.

Example: 5,000 business miles × 72.5¢ = $3,625 deduction. You don’t add up gas receipts — the rate covers all of it.

Standard rate vs actual expenses

You have two ways to deduct vehicle costs, and you pick one:

• Standard mileage method. Multiply business miles by the 2026 rate. Simple, requires only a mileage log, and is usually the better deal for fuel-efficient or paid-off cars.
• Actual expense method. Add up all vehicle costs for the year — gas, insurance, repairs, registration, lease or depreciation — then deduct the business-use percentage. Better for expensive vehicles, heavy repair years, or low-MPG trucks.

A planning tip: if you want the option to use the standard rate over the life of a car, choose it in the first year you use the vehicle for business. You generally can’t switch from actual to standard later on a vehicle where you’ve claimed depreciation.

Which miles actually count

This is where freelancers most often get it wrong. Deductible business miles include:

• Driving to a client site, meeting, or job
• Trips to buy supplies or equipment for the business
• Driving between two work locations
• Trips to the bank, post office, or accountant for business

Commuting does not count. Driving from home to a regular workplace is personal, even if you’re self-employed. One useful consequence: if your home is your principal place of business (see the home office deduction), trips from your home office to clients are business miles from the start — there’s no nondeductible commute.

The mileage log the IRS expects

A deduction you can’t substantiate can be disallowed, and vehicle deductions are a common audit target. For each business trip, record:

• Date
• Destination / purpose (e.g., “client meeting — Acme Co.”)
• Miles driven

Log it contemporaneously — at the time of the trip, not reconstructed from memory in April. A phone app that tracks drives automatically is the easiest way; a notebook in the glovebox works too. Also note your odometer reading at the start and end of the year.

How much it’s really worth

Because mileage reduces net profit, it saves you more than income tax alone. On that $3,625 example deduction, a freelancer also avoids self-employment tax on the same amount — so the real saving is your income-tax bracket plus roughly 14% in SE tax. (How SE tax works.) See the full deductions list for the other write-offs that stack with this one.

A side-by-side worked example

Numbers make the standard-vs-actual decision concrete. Picture a freelance photographer with 8,000 business miles on a 5-year-old paid-off sedan, plus 7,000 personal miles for a total of 15,000 — so business-use percentage is 8,000 ÷ 15,000 ≈ 53%.

Standard mileage method:

8,000 business miles × 72.5¢ = $5,800 deduction. No receipts needed beyond a mileage log.

Actual expense method: annual vehicle costs for that car add up like this:

• Gas: $2,400
• Insurance: $1,500
• Maintenance and repairs: $900
• Registration and tags: $200
• Depreciation (MACRS, year five): $1,200
• Total annual vehicle cost: $6,200

Apply the 53% business-use percentage: $6,200 × 53% ≈ $3,286 deduction.

Standard mileage wins handily here — $2,514 more in deductions, and a fraction of the paperwork. That gap flips for high-cost vehicles (a leased SUV at $7,800/year of total costs would beat standard mileage at 53% use), heavy repair years, or low-MPG trucks. The math is what decides — never assume.

The first-year choice

There is one technical rule that catches freelancers off guard: you can switch from standard mileage to actual expenses on the same vehicle later, but you cannot switch the other way if you took depreciation under the actual method. If you might want flexibility, start with standard mileage in the vehicle’s first business year and you keep both doors open for the rest of the vehicle’s life.

If you switch to actual expenses in a later year on a vehicle that started with standard, depreciation has to be computed using the straight-line method going forward, not MACRS — a minor but real downside. For most freelancers with one car driven a few thousand business miles a year, the straightforward play is: start with standard, track miles, stay with standard.

Sources

• IRS — 2026 Standard Mileage Rates
• IRS — Topic 510 — Business Use of Car
• IRS — Self-Employment Tax