Can I Deduct Mileage if I Don’t Own the Car?
Learn when you can deduct mileage for business use, even if you don’t own the car, and how to choose between standard mileage and actual expenses.
Tracking mileage for tax deductions is common, but many wonder if they can claim this benefit without owning the vehicle. The IRS allows certain taxpayers to deduct mileage expenses, and ownership is not always required. Eligibility depends on business use and how expenses are reported.
Eligibility to Deduct Mileage
The IRS permits deductions for business, medical, moving (for active-duty military), or charitable mileage. While vehicle ownership is unnecessary, the taxpayer must be responsible for operating costs and use the vehicle for qualifying purposes. Employees who receive mileage reimbursements from their employer cannot claim a deduction, as reimbursements are not taxable income. However, self-employed individuals and independent contractors can deduct mileage if they meet IRS criteria.
Business mileage must be directly tied to income-generating activities, such as travel between job sites, client meetings, or business-related errands. Commuting from home to a regular workplace does not qualify, but travel between multiple work locations in a single day is deductible. Rideshare drivers, such as those working for Uber or Lyft, can claim mileage for trips while transporting passengers or driving to pick them up.
Medical mileage is deductible when travel is for necessary medical care, such as doctor visits or hospital treatments. The IRS sets an annual mileage rate for medical purposes, and only expenses exceeding 7.5% of adjusted gross income (AGI) can be deducted. Charitable mileage applies when driving for a qualified nonprofit organization, with a fixed deduction rate set by the IRS.
Tax Reporting Requirements
Proper documentation is required to claim a mileage deduction. Taxpayers must maintain detailed records, including the date of each trip, starting and ending locations, purpose of travel, and total miles driven. Digital tracking apps like MileIQ or Everlance can automate this process and generate IRS-compliant reports. Without adequate records, deductions may be disallowed in an audit.
Self-employed individuals report mileage expenses on Schedule C (Form 1040), while medical and charitable mileage deductions are claimed on Schedule A for itemized deductions. Business owners depreciating a vehicle may also need to complete Form 4562. If an employer reimburses mileage under an accountable plan, the reimbursement is not reported as income. However, if it falls under a non-accountable plan, it must be included in taxable wages on Form W-2.
Mileage deductions for employees were previously allowed as unreimbursed business expenses under miscellaneous itemized deductions, but this provision was suspended from 2018 through 2025 by the Tax Cuts and Jobs Act. As a result, W-2 employees who are not reimbursed cannot deduct mileage on federal tax returns. Some states still allow these deductions, so reviewing local tax laws is important.
Standard Mileage Rate vs. Actual Expense
Taxpayers can choose between the standard mileage rate and the actual expense method for deductions. The standard mileage rate, set annually by the IRS, provides a fixed deduction per mile driven for eligible purposes. For 2024, the rate is 67 cents per mile for business travel, 21 cents for medical or moving expenses (for active-duty military), and 14 cents for charitable driving. This method simplifies recordkeeping, as only mileage and the purpose of travel need to be documented.
The actual expense method allows deductions for all costs associated with vehicle operation for qualifying activities, including fuel, maintenance, repairs, insurance, lease payments, depreciation, registration fees, and loan interest. Taxpayers must maintain detailed records of each expense and allocate costs based on business versus personal use. For example, if 60% of total mileage is for business, then 60% of eligible expenses can be deducted.
The choice between methods depends on vehicle costs and usage. High-mileage drivers often benefit from the standard rate, while those with significant vehicle expenses may find the actual expense method more advantageous. For leased vehicles, once the standard mileage rate is selected, it must be used for the entire lease term, as switching to actual expenses is not permitted.