How Many Cents Per Mile Can You Write Off?

The Internal Revenue Service (IRS) provides a method for taxpayers to deduct the costs of using a vehicle for specific purposes, such as business, charitable, or medical activities. This vehicle expense deduction can be calculated in one of two ways. The simpler approach, known as the standard mileage rate, allows for a straightforward calculation based on the number of miles driven.

The Standard Mileage Rate

The IRS annually sets standard mileage rates to reflect the costs of operating a vehicle. For 2025, the rate for business use of a vehicle is 70 cents per mile.

For other types of driving, the rates for 2025 remain unchanged. The rate for medical purposes, as well as for moving for qualified active-duty members of the Armed Forces, is 21 cents per mile. Driving for charitable organizations has a rate of 14 cents per mile. These rates apply to gasoline, diesel, hybrid, and fully electric vehicles.

The standard mileage rate is intended to cover most of the costs of operating your vehicle, such as fuel, oil, maintenance, repairs, insurance, and depreciation. However, certain specific costs are not factored into the standard rate. Taxpayers can deduct parking fees and tolls incurred for business purposes separately, in addition to the amount calculated using the standard mileage rate.

Eligibility for the Deduction

The ability to claim a deduction for vehicle expenses is primarily available to self-employed individuals. This includes independent contractors, freelancers, and gig economy workers who use their personal vehicles for work-related activities. These taxpayers can deduct the costs of driving for client meetings, running business errands, or traveling between temporary work locations. The deduction is claimed on Schedule C (Form 1040), Profit or Loss from Business.

Most W-2 employees are no longer able to deduct unreimbursed travel expenses, as the law suspended this deduction through 2025. This means employees who use their personal car for work but are not reimbursed generally cannot claim a mileage deduction on their federal tax return.

There are a few specific exceptions for employees. Armed Forces reservists traveling more than 100 miles from home for their service, certain state or local government officials paid on a fee basis, and qualifying performing artists can still deduct their travel expenses. These individuals can claim the deduction on Form 2106, Employee Business Expenses.

Required Recordkeeping

To claim a vehicle expense deduction, the IRS requires taxpayers to maintain detailed and contemporaneous records, meaning they must be created at or near the time the expenses are incurred. A compliant mileage log is the foundation of this documentation.

For every business-related drive, the log must include:

• The date of the trip
• The total miles of the trip
• The destination
• The specific business purpose of the travel

The total mileage for the year for business, commuting, and other personal purposes must also be tracked. Maintaining these records can be done using a physical logbook, a spreadsheet, or through various mileage-tracking applications available for smartphones. These apps often use GPS to automatically track trips, simplifying the process of creating a detailed and accurate log.

The Actual Expense Method

As an alternative to the standard mileage rate, taxpayers can deduct the actual costs of operating their vehicle for business. The actual expense method involves tracking all vehicle-related expenditures, including gasoline, oil changes, tires, repairs, insurance, registration fees, and depreciation.

To calculate the deductible amount, you must first determine the percentage of your vehicle’s use that was for business. This is done by dividing the total business miles by the total miles the vehicle was driven during the year. The resulting business-use percentage is then applied to each of the actual expenses.

For example, if you drove 20,000 miles in a year, with 15,000 for business, your business-use percentage is 75%. If your total vehicle expenses were $8,000, you could deduct $6,000. A taxpayer who uses the standard mileage rate for a vehicle they own must use that method in the first year it is available for business use; in later years, they can switch between methods.