Can You Estimate Mileage for Taxes?

The Internal Revenue Service (IRS) does not permit the estimation of mileage for tax deductions. Instead, the IRS mandates specific substantiation requirements for all business expenses, including vehicle mileage. To claim a deduction, you must maintain accurate and detailed records, not simply provide an estimate. Precise documentation is central to complying with tax regulations.

The IRS Stance on Mileage Estimation

The Internal Revenue Service maintains stringent rules regarding the substantiation of business expenses, and mileage is no exception. Taxpayers cannot estimate mileage deductions because Internal Revenue Code Section 274 requires adequate records to prove expense elements. For a mileage deduction to be valid, you must substantiate the amount, the time and place of travel, and the business purpose of the expense. This ensures claimed deductions are legitimate business costs, not personal expenses. Without comprehensive and contemporaneous records, any mileage deduction risks disallowance during an IRS audit.

Essential Mileage Record Keeping

To meet IRS requirements for mileage deductions, specific information must be recorded for each trip. This includes:
The date of the trip
The destination or specific place of travel
A clear and specific purpose for the trip
The total mileage for each trip
Odometer readings at the beginning and end of the tax year

Effective Mileage Tracking Approaches

Adopting an effective approach to track mileage is essential due to IRS substantiation rules. Many taxpayers find success with manual logbooks or spreadsheets, where they can systematically record all the required data points for each trip. Mobile mileage tracking applications offer an automated solution, using GPS to record trips and generate detailed reports. These apps capture necessary information, such as start and end times, locations, and total miles, simplifying the record-keeping process. Regardless of the method chosen, the key is to maintain records contemporaneously, meaning at or near the time the travel occurs, to ensure accuracy and compliance.

Qualified Deductible Mileage

Understanding which types of mileage qualify for a tax deduction is crucial. Business mileage, such as travel to client meetings, between different job sites, or to temporary work locations, is generally deductible. This also includes travel for business-related errands or customer visits.

Medical mileage, incurred when traveling for medical care, and charitable mileage, associated with volunteer work for qualified organizations, are also eligible deductions. Moving mileage can be deducted in specific, limited circumstances, primarily for active-duty military personnel relocating due to a permanent change of station. Commuting mileage, which is travel between your home and your regular workplace, is not considered a deductible expense.

Determining Your Mileage Deduction

Once qualified mileage is tracked, there are two primary methods for calculating your deduction: the standard mileage rate or the actual expenses method. The standard mileage rate, set annually by the IRS, calculates your deduction by multiplying total qualified miles by the published rate. For 2025, the standard business mileage rate is 70 cents per mile, covering most vehicle operating costs, including depreciation, fuel, maintenance, and insurance.

Alternatively, the actual expenses method allows you to deduct the actual costs of operating your vehicle for business. This method requires detailed records of all vehicle expenses, such as gas, oil, repairs, insurance, depreciation or lease payments, tires, registration fees, parking fees, and tolls. While potentially yielding a larger deduction, the actual expenses method demands more extensive record-keeping compared to the standard mileage rate. If you choose the standard mileage method in the first year a vehicle is used for business, you can switch to the actual expense method in later years. However, if you start with the actual expense method, you are committed to it for that vehicle’s life.