Can I Deduct Mileage for 1099 Work?

Many independent contractors and self-employed individuals, often referred to as 1099 workers, use their personal vehicles for business activities. Deducting mileage from these business-related trips can significantly reduce taxable income. The Internal Revenue Service (IRS) provides specific guidelines for these deductions, allowing eligible individuals to claim a portion of their vehicle expenses.

Understanding Deductible Mileage

Deductible mileage for 1099 workers includes travel considered ordinary and necessary for business operations. This means the travel must be common and accepted in the industry and helpful for the business. A distinction exists between deductible business travel and non-deductible commuting. Generally, travel from a personal residence to a regular place of business is considered commuting and cannot be deducted.

However, if a home office qualifies as the principal place of business, travel from that home office to a client’s location, a temporary work site, or to pick up supplies is deductible. For example, a freelance graphic designer working from a qualifying home office could deduct mileage for trips to meet clients, attend industry events, or purchase design materials. Deliveries for a business, travel between multiple business locations, or trips to attend business-related conferences also qualify as deductible mileage.

Determining Your Deduction Amount

When claiming a mileage deduction, 1099 workers can choose between two methods: the standard mileage rate or the actual expenses method. The standard mileage rate offers a simplified approach, deducting a set amount per mile for all business miles driven. This rate, established annually by the IRS, covers the combined fixed and variable costs of operating a vehicle, including depreciation, insurance, fuel, and maintenance. For 2025, the business standard mileage rate is 70 cents per mile. This method requires only tracking business miles, making it simpler.

The actual expenses method allows for the deduction of the actual costs of operating the vehicle for business. This method requires record-keeping of all vehicle-related expenses. Deductible actual expenses can include gasoline, oil, repairs, maintenance, tires, insurance premiums, vehicle registration fees, and a portion of the vehicle’s depreciation or lease payments. To calculate the deduction, total vehicle expenses are multiplied by the business-use percentage, determined by dividing business miles by total miles driven.

Choosing between these methods depends on individual circumstances. While the standard mileage rate offers simplicity, the actual expenses method might yield a larger deduction if vehicle operating costs are high, such as with an expensive vehicle or significant repair expenses. If the actual expense method is used for a vehicle in its first year of business service, the standard mileage rate cannot be used for that same vehicle in future years. Conversely, if the standard mileage rate is chosen in the first year, a taxpayer can switch to the actual expense method in subsequent years.

Documentation Requirements

Accurate and comprehensive record-keeping is fundamental for substantiating mileage deductions, regardless of the calculation method chosen. The IRS mandates that records be “comprehensive and contemporaneous,” meaning they should show full trip details and be maintained at or near the time of the travel. This practice helps ensure the accuracy and validity of the claimed deductions.

For each business trip, specific information must be recorded, including:
The date of the trip
The destination
The business purpose for the travel
The total mileage driven for that specific business activity

Many individuals track this information using mileage logbooks, smartphone applications, or detailed spreadsheets. Recording odometer readings at the beginning and end of the year, or when a vehicle is first placed into business service, is helpful for verification.

When using the actual expenses method, retaining receipts for all vehicle-related expenditures is required. This includes documentation for fuel purchases, oil changes, repairs, insurance payments, and any other costs associated with operating the vehicle. Maintaining these detailed records is important, as the IRS requires them for three years from the tax return’s filing date, and potentially longer in certain situations.

Claiming the Deduction

Independent contractors and self-employed individuals typically report their business income and expenses, including mileage deductions, on Schedule C (Form 1040), Profit or Loss From Business. This form is designed for sole proprietors to detail their business financial activities. The calculated mileage deduction amount is entered on Line 9 of Schedule C, which is designated for “Car and truck expenses.”

To complete Schedule C, Part IV, detailed information about the vehicle’s use, such as the date it was placed into business service and total mileage, must be provided if the standard mileage rate is claimed or if the vehicle is leased or fully depreciated. If depreciation is claimed or if multiple vehicles are used, additional forms like Form 4562, Depreciation and Amortization, may be required. The net profit or loss from Schedule C is then carried over to Form 1040, impacting the individual’s overall taxable income.