2026 Mileage Deduction Calculator
The IRS raised the business mileage rate halfway through 2026, so a mile driven in March and a mile driven in September are not worth the same. This calculator splits your year at July 1, compares standard mileage against actual vehicle costs, and shows what the winner saves after self-employment tax.
Standard mileage vs actual expense
Split at July 1: 72.5 cents per mile before, 76 cents per mile afterWhy 2026 mileage needs two rates, not one
The IRS normally sets one business mileage rate for the whole year. In 2026 it did not. The rate ran at 72.5 cents per mile from January 1, then rose to 76 cents per mile from July 1 (IRS standard mileage rates). Every mileage calculator that projects a single 2026 rate is wrong for one half of your year, and if it kept the January figure it is wrong in the direction that costs you money.
Split your log at June 30 and apply each rate to its own months. On twenty thousand business miles, weighted toward the second half of the year, the difference between doing this and using the January rate throughout is several hundred dollars of deduction.
What each field means
Business miles by half-year
Miles driven for business, separated at June 30. Commuting between home and a regular workplace is not business mileage; travel between job sites, to clients, and to suppliers is.
Total miles driven
Every mile on the car this year, business and personal. Business miles divided by this figure gives the business-use share, which is the multiplier the actual expense method applies to your vehicle costs.
Running costs
Fuel, oil, repairs, tyres, servicing. Costs that scale with how much you drive.
Ownership costs
Insurance, registration, and either lease payments or depreciation. Costs you carry whether the car moves or not. Depreciation is the field most people leave empty and it is often the largest line on the actual side.
Parking and tolls
These sit outside the comparison. Business parking and tolls "are separately deductible, whether you use the standard mileage rate or actual expenses" (IRS Topic 510), so the calculator adds them to both sides.
The formulas
1. Business Miles = First-Half Miles + Second-Half Miles
2. Business-Use Share = Business Miles / Total Miles Driven
3. Standard Mileage Deduction = (First-Half Miles × 72.5 cents per mile)
+ (Second-Half Miles × 76 cents per mile) + Parking & Tolls
4. Actual Expense Deduction = (Running Costs + Ownership Costs)
× Business-Use Share + Parking & Tolls
5. SE Tax Saved = SE tax on profit − SE tax on (profit − deduction)
6. Income Tax Saved = income tax before − income tax after, allowing for
the half-SE-tax deduction moving with it
7. Total Saved = SE Tax Saved + Income Tax Saved What the deduction is actually worth
A vehicle deduction goes on Schedule C, so it reduces the net profit that both self-employment tax and income tax are calculated from. Self-employment tax alone runs at 15.3% on 92.35% of net earnings (IRS), before a single bracket applies. The calculator computes your saving by running the full tax twice, once with the deduction and once without, instead of multiplying by an assumed rate.
Two worked examples
Consultant, moderate driving, newer car
- Business Miles: 5,200 before July + 6,100 after = 11,300
- Total Miles: 18,000 (62.8% business use)
- First-Half Value: $3,770
- Second-Half Value: $4,636
- Standard Mileage Total: $8,726 (including $320 parking and tolls)
- Actual Expense Total: $5,279
- Difference: $3,447 in favour of standard
- Tax Saved: $3,017
- Gained by splitting at July 1: $214
Contractor, heavy driving, older paid-off vehicle
- Business Miles: 9,800 before July + 11,400 after = 21,200
- Total Miles: 26,000 (81.5% business use)
- First-Half Value: $7,105
- Second-Half Value: $8,664
- Standard Mileage Total: $16,309 (including $540 parking and tolls)
- Actual Expense Total: $10,406
- Difference: $5,903 in favour of standard
- Tax Saved: $4,123
- Gained by splitting at July 1: $399
The pattern in both examples is the ordinary one: high mileage on a cheap, paid-off car favours the standard rate, because the rate pays the same whatever the car cost. A low-mileage year in an expensive or heavily depreciating vehicle pushes the other way.
The rules that constrain the choice
The first year decides what you may do later
"To use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business" (IRS Topic 510). Take actual expenses in year one and the standard rate is closed to you for that vehicle. Take the standard rate in year one and you keep the option to switch later. That asymmetry is the single most consequential decision on this page, and it is made before you know which method will win.
Leases lock you in for the whole term
"For a car you lease, you must use the standard mileage rate method for the entire lease period (including renewals) if you choose the standard mileage rate" (IRS Topic 510). No switching mid-lease, and renewals count as the same period.
One method per car per year
You choose between the two methods for a given vehicle in a given year; you do not take the better parts of each (IRS Publication 463). Parking and tolls are the exception, and they are deductible either way.
Most employees cannot deduct this at all
The unreimbursed employee expense deduction went with the miscellaneous itemized deductions suspended in 2017, and the One Big Beautiful Bill Act made that suspension permanent (University of Illinois Tax School). Form 2106 survives for a narrow set of filers: Armed Forces reservists, qualified performing artists and fee-basis government officials (IRS Topic 510). If you are a W-2 employee outside those categories, the conversation to have is with your employer about a mileage reimbursement, not with the IRS.
A log the IRS will accept
Both methods need the same underlying record: date, destination, business purpose and miles, kept contemporaneously. The standard rate does not exempt you from proving the miles — it only exempts you from keeping every fuel receipt. Reconstructing a year of driving from memory in April is where most of these deductions actually fail.
Common questions
Do I really have to split my miles at July 1?
Yes, if you want the correct number. The rate applies to miles driven while it was in effect, so first-half miles are valued at 72.5 cents per mile and second-half miles at 76 cents per mile (IRS). Using one rate for the year overstates or understates the deduction depending on which rate you pick, and the mid-year change is exactly the kind of detail an examiner can check against a dated log.
Is commuting deductible?
No. Travel between home and a regular place of work is a personal expense, however far it is. Driving between work locations, to clients, or to a temporary work site is business mileage. If your home is your principal place of business, the first trip of the day is more likely to qualify, which is one of the quieter benefits of a valid home office.
Which method should I pick in the first year of a new car?
Run both here with your best estimate, then weigh the option value. Choosing the standard rate in year one keeps both doors open for later years; choosing actual expenses closes the standard-rate door for that vehicle. If the two numbers are close, the flexible choice is usually worth more than the small difference.
Can I claim mileage and a home office in the same year?
Yes, they are separate deductions on the same Schedule C, and they interact in your favour: a qualifying home office can make trips from home to a work site deductible business mileage rather than commuting. Both reduce the same net profit, so both cut self-employment tax as well as income tax.
Primary Statutory Sources & Verification
Programmatically audited against federal & state regulatory recordsThis tool is general information, not tax advice. It does not model depreciation limits, bonus depreciation, section 179, the business-use tests that apply to those, or state tax. Your facts decide your answer — consult a qualified tax professional before filing. How we source and check every figure is set out in our editorial policy.
Working from home as well?
The home office deduction runs on the same Schedule C profit, and the simplified method is not always the smaller number. Compare both methods on your own figures.