Which car-expense method wins on your tax return?
| Year | Business Rate | 10,000 Miles Pays |
|---|---|---|
| 2026 (Jul 1 – Dec 31) | 76.0¢ | $7,600 |
| 2026 (Jan 1 – Jun 30) | 72.5¢ | $7,250 |
| 2025 | 70.0¢ | $7,000 |
| 2024 | 67.0¢ | $6,700 |
| 2023 | 65.5¢ | $6,550 |
| 2022 (Jul – Dec) | 62.5¢ | $6,250 |
| 2022 (Jan – Jun) | 58.5¢ | $5,850 |
| 2021 | 56.0¢ | $5,600 |
2026's two-step rate (IR-2026-29) was the first mid-year business-rate increase since 2011. If your tax year is 2026, split your miles at June 30; the calculator does it automatically.
| Cost | Standard Rate | Actual Method |
|---|---|---|
| Gas and oil | Built into the rate | × business-use % |
| Maintenance, repairs, tires | Built into the rate | × business-use % |
| Insurance | Built into the rate | × business-use % |
| Depreciation / lease payments | Built into the rate | × business-use % (caps apply) |
| Registration and license fees | Built into the rate | × business-use % |
| Loan interest | Not included | × business-use % (self-employed) |
| Parking and tolls | Deductible separately | Deductible separately |
Self-employed filers, gig drivers, landlords, and anyone using a personal car for work picks between two deduction methods every year. The standard mileage method is simple: business miles times the IRS rate. The actual method adds up every real cost of the car and claims the business share of the total. Whichever is bigger goes on Schedule C (or the farm, rental, or employee-business form that fits), and the difference on identical driving routinely runs four figures.
Standard deduction = business miles × rate, split across the 2026 rate change (72.5¢ through June 30, 76¢ from July 1). Business-use % = business miles ÷ total miles. Actual deduction = (gas + maintenance + insurance + depreciation + registration + loan interest) × business % + business parking and tolls. The per-mile cards divide each total by business miles so you can see which method pays more per unit of driving.
Enter business miles per half of the year (the calculator sums them for non-2026 years). Total miles sets the business-use percentage, so include personal commuting and errands. For actual costs, pull the year's numbers from your bank and insurance statements; use the depreciation your tax software calculates, or lease payments if you lease. Parking and tolls go in their own field since they're deductible on top of either method.
A consultant drove 12,000 business miles in 2026, 6,000 in each half, out of 18,000 total miles on the car. Standard pays 6,000 × $0.725 + 6,000 × $0.76 = $4,350 + $4,560 = $8,910. Her actual costs: $3,600 gas, $1,200 maintenance, $1,800 insurance, $2,400 depreciation, $300 registration, $300 loan interest, or $9,600 total. Business use is 12,000/18,000 = 66.7%, so actual claims $6,400, plus $420 of parking and tolls = $6,820. Standard wins by $2,090, worth 74.25¢ per business mile against an actual 56.8¢.
Flip the profile and the answer flips. A brand-new truck with heavy payments driven few business miles, where business use is 90% of odometer miles, often pays more under actual. That's why the first-year rule matters: claim standard in year one and you keep the right to switch; claim actual with depreciation first and you're locked in for that car.
Standard usually wins when you drive a lot of business miles in a cheap or paid-off car: a 15-year-old sedan with 20,000 business miles claims about $14,850 at 2026 rates while its actual upkeep might only support $5,000 to $6,000. Actual tends to win for expensive, new, or heavily depreciating vehicles driven few business miles, or when business use is a large share of total miles.
Only if you used the standard rate the first year the car was used for business. That first-year choice preserves the option to switch in later years. If you deduct actual expenses (including depreciation) in year one, you're locked into actual for the life of that car. Leased cars follow a stricter rule: pick standard in year one and you must keep it for the entire lease.
Gas, oil, routine maintenance and repairs, tires, insurance, license and registration fees, and depreciation or lease payments. It does not include parking and tolls, which are separately deductible under both methods, or loan interest, which self-employed filers can deduct under the actual method only, proportional to business use.
72.5 cents per mile for January 1 through June 30, 2026, then 76 cents per mile from July 1 (IR-2026-29), a rare mid-year increase. A 2026 trip spanning both halves is split: miles through June at 72.5 cents, miles from July at 76 cents. The 2025 rate was a flat 70 cents.
Yes. Both methods start with a contemporaneous mileage log: date, destination, business purpose, and miles. The IRS also wants the year's opening and closing odometer readings to establish total miles, which sets your business-use percentage for the actual method. Apps or a notebook both work; reconstructing a log from memory after an audit does not.
This calculator provides estimates for planning, not tax advice. Depreciation limits, Section 179 elections, and special situations (two vehicles, employer reimbursement, state rules) change the math. Confirm your method with a CPA or tax software before filing.