If you drive your own car for work, there is a good chance you can turn those miles into money back at tax time. It sounds complicated, but the entire system rests on one number that the government updates each year. Once you understand what that number is and how to use it, the rest is just basic arithmetic. This guide explains the current mileage rate in plain language: what it is, who it is for, how to use it, and the simple rules that decide whether you actually get to keep the deduction.
What the mileage rate even is
The IRS standard mileage rate is a set amount you can deduct for each mile you drive for business. Instead of tracking every individual car expense, you multiply your business miles by this rate, and that gives you your deduction. The rate is designed to cover all the costs of running a vehicle, bundled into one figure.
What the rate is built to account for:
- Fuel
- Depreciation (the car losing value over time)
- Insurance
- Maintenance and repairs
- Registration and related costs
That is the elegance of it. You do not have to save every petrol receipt or calculate depreciation yourself. The single rate stands in for all of it.
The current rate
For 2026, the IRS standard mileage rate for business use is 72.5 cents per mile, up from 70 cents in 2025. There are also separate, lower rates for a couple of specific purposes:
| Purpose | Current rate per mile |
|---|---|
| Business use | 72.5 cents |
| Medical or moving (limited eligibility) | 20.5 cents |
| Charitable service | 14 cents |
For almost everyone reading this, the business rate is the one that matters. It applies whether you drive a petrol, diesel, hybrid, or fully electric vehicle.
Who can actually use it
The business mileage deduction is mainly for people who drive their own vehicle for work and are not fully reimbursed for it. The clearest cases:
- Self-employed people and freelancers
- Gig workers doing delivery, rideshare, or shopping
- Small business owners
- Independent contractors of every kind
One important note: under current rules, most regular employees cannot deduct unreimbursed business mileage on their federal taxes. So this is primarily a tool for the self-employed and business owners. If your employer pays you back for mileage, that is handled separately and is not a deduction you claim.
How to use it: the simple math
Here is the part that surprises people with how easy it is. Once you know your business miles, the calculation is a single multiplication:
Business miles × 0.725 = Your deduction
Here is what that looks like at different mileage levels:
| Business miles | Deduction at 72.5 cents |
|---|---|
| 1,000 | $725 |
| 3,000 | $2,175 |
| 6,000 | $4,350 |
| 10,000 | $7,250 |
| 15,000 | $10,875 |
That deduction comes off your taxable income. The actual money it saves you depends on your tax situation, but the more business miles you properly document, the lower your tax bill.
The one rule that trips people up
The math is easy. The record-keeping is where deductions are won or lost. The IRS requires what is called a contemporaneous log, which simply means records you keep at or near the time of each trip, not numbers you invent later. For every business trip, your record should show:
- The date of the trip
- The destination or route
- The business purpose
- The miles driven
The key thing to remember: the IRS does not accept estimates or logs you reconstruct the night before filing. If your “records” are a guess, an auditor can throw them out, and your deduction with them.
What counts as a business mile
Not every mile qualifies, so it helps to know the difference. In general:
- Counts: Driving to meet a client, between job sites, to pick up supplies, to a temporary work location.
- Does not count: Your normal commute from home to a regular workplace, and any personal driving.
Keeping business and personal miles clearly separated all year is what makes your final number trustworthy and defensible.
Standard rate or actual expenses?
The standard mileage rate is one of two methods. The other is the actual expense method, where you track every real cost and prorate it for business use. A quick comparison:
| Method | What you track | Best for |
|---|---|---|
| Standard mileage rate | Business miles × 72.5 cents | Most people; simple, less paperwork |
| Actual expense method | Fuel, repairs, insurance, depreciation, prorated | Expensive vehicles with heavy business use |
For most people driving an ordinary car, the standard rate wins on simplicity. Just note that if you want to use it, you generally need to choose it in the first year you use the car for business.
A quick example
Imagine a self-employed consultant who drove 7,200 business miles this year. The calculation:
- Business miles: 7,200
- Rate: 72.5 cents
- Deduction: 7,200 × 0.725 = $5,220
That $5,220 comes straight off her taxable income, all from driving she was doing anyway. The only thing that made it possible was keeping a proper record of those miles.
How to make it painless
You do not need a complicated system, just a consistent one. The easiest approach is to stop relying on memory:
- Track automatically so trips are captured in the background.
- Classify trips daily, right after you park.
- Separate business from personal clearly.
- Export your records regularly, especially if you pay estimated taxes.
The bottom line
The current mileage rate of 72.5 cents per mile turns ordinary work driving into a genuine tax deduction, and using it is as simple as multiplying your business miles by the rate. The only thing standing between you and the full benefit is a proper record the IRS will accept. Keep an accurate log, separate business from personal, and that everyday driving becomes money back in your pocket. No accounting degree required.
