The IRS allows self employed and independent contractors to take a tax deduction for the miles driven for business. Only business miles may be deducted, and the mileage must be fully documented. These miles must be outside of the standard commute between your home and work if you are a commuter. If you use your car for business-related purposes outside your regular commute, your mileage may be deductible, along with general car maintenance expenses.
Method 1: The Standard Mileage Rate
The Standard mileage rate, which you will multiply by the number of miles you’ve driven for business purposes only, is the IRS’ standard mileage rate. The mileage rate for 2026 is ¢72.5 per mile, and 2025 was ¢70 per mile.
Method 2: The Actual Expense Method
For the actual expense method, you must determine the percentage of your vehicle's total use that was for business. This percentage is then applied to all eligible vehicle expenses, including:
- Gas and oil
- Repairs and maintenance
- Insurance
- Tires
- Registration fees
- Lease payments or depreciation
For most people, the standard mileage rate is the convenient choice. However, if your vehicle's actual expenses for the year were particularly high (e.g., due to a major repair), the actual expense method may provide a larger deduction. Once you choose to use the Actual Method, you must continue using this method for the life of that vehicle.
If you choose the standard mileage rate for a leased car, you must use that method for the entire lease period.
Deductible vs. non-deductible miles
- Deductible: Trips to clients, errands for business supplies, and travel between different work locations are all considered business mileage.
- Non-deductible: Your regular commute from home to your primary place of work is not deductible.
Recommendations for tracking mileage
To actually use this expense, you will need to keep a close track of the business miles you drive each year. These miles must be outside of the standard commute between your home and work if you are a commuter.
You can choose to keep a mileage log or use a mileage tracking app such as MileIQ.
Where to record mileage in Heard?
You will be able to upload your mileage in the Tax Questionnaire. The questionnaire can be accessed in the Annual Tax Center.
While a Sole Proprietor can directly deduct vehicle expenses (either standard mileage or actual expenses) on Schedule C, the owner of an S Corp must be reimbursed by the Corporation under an “Accountable Plan” for the expense to be deductible by the S Corp.