How the IRS Mileage Deduction Works
If you use your own car for work, the IRS lets you deduct the cost of that driving. Most gig workers use the standard mileage rate, a fixed amount per business mile that is designed to cover gas, oil, repairs, tires, insurance, registration and depreciation. You multiply your business miles by the rate and subtract the result from your income on Schedule C. That reduces your net profit, which lowers both your self-employment tax (15.3%) and your income tax. For a delivery or rideshare driver, it is usually the largest deduction on the return.
The 2026 Split Rate
In 2026 the IRS changed the rate part-way through the year. Miles driven from January 1 to June 30 are worth 72.5¢ each, and miles driven from July 1 to December 31 are worth 76¢ each. The 2025 rate was 70¢ for the whole year. You apply the rate in effect on the day you drove, so the order of your miles matters.
| Period | Rate per business mile | Source |
|---|---|---|
| January 1 – June 30, 2026 | 72.5¢ | IRS Notice 2026-10 |
| July 1 – December 31, 2026 | 76¢ | IRS Announcement 2026-11 |
| All of 2025 (for comparison) | 70¢ | Prior-year rate |
12,000 × $0.725 + 8,000 × $0.76 = $8,700 + $6,080 = $14,780
Sources: The 72.5¢ rate for January 1 – June 30, 2026 comes from IRS Notice 2026-10, and the 76¢ rate for July 1 – December 31, 2026 comes from IRS Announcement 2026-11 (Internal Revenue Bulletin 2026-29). See also the IRS standard mileage rates page.
IRS Substantiation and Logbook Requirements
The deduction is only as good as your records. For vehicle expenses the IRS requires you to substantiate each business trip with adequate records, which IRS Publication 463 describes in detail. In practice, your log should show:
- The date of each business trip.
- The destination or purpose, such as "DoorDash deliveries" or "supply run to the post office".
- The miles driven for that trip, from odometer readings or a GPS record.
- Total miles for the year, business, commuting and personal, usually shown by odometer readings at the start and end of the year.
Business Miles vs. Commuting
Only business miles count. Driving between home and a regular workplace is commuting and is not deductible. Miles driven to pick up and deliver orders, to drop off a passenger, to buy supplies or to visit a client are business miles. Whether miles driven while waiting for an order or ride request qualify can depend on your circumstances, so ask a tax professional. When in doubt, log the trip and note its purpose.
Why Tracking Every Mile Matters
At 76¢ a mile, every missed mile is a missed deduction. In the example above, each 1,000 miles is worth $760 of deductions, and about $175 less tax for this driver. Losing track of 1,500 miles over a year would cost $1,140 of deductions and raise the tax bill by about $246. Across a few thousand miles, the difference pays for a mileage tracker many times over.
Standard Mileage Rate vs. Actual Expenses
There are two ways to deduct vehicle costs. For most gig drivers the standard rate is simpler and often as good.
| Factor | Standard mileage rate | Actual expenses |
|---|---|---|
| What you deduct | A fixed rate per business mile that covers gas, repairs, insurance and depreciation | The business share of your real car costs |
| Records | A mileage log: date, purpose, miles | A mileage log plus receipts for every cost |
| Often best for | Most gig drivers who want simplicity | An expensive or inefficient vehicle |
| Choosing it | For a car you own, generally chosen in the first year you use it for business | Accelerated depreciation in an earlier year can rule out the standard rate |
Worked Example: 20,000 Miles, Split Across the Year
Scenario: a single driver in Texas with $40,000 of gross earnings, $800 of other expenses, and 20,000 business miles: 12,000 before July and 8,000 after.
- Mileage deduction: $8,700 + $6,080 = $14,780.
- Net profit: $40,000 − $14,780 − $800 = $24,420, instead of $39,200 without the deduction.
- Self-employment tax falls from $5,539 to $3,450, and income tax falls from $1,704 to $528.
- Total tax: $7,243 without the deduction, $3,978 with it, a saving of $3,265.
Related Tools and Guides
Turn your deduction into a full tax estimate with the 1099 Gig Tax Calculator or the Multi-Platform 1099 Tax Calculator, then plan your payments with the Quarterly Estimated Tax Deadline Calculator. For platform-specific help, try the DoorDash, Uber or Lyft calculators. Our Complete Gig Worker Tax Guide for 2026 covers the whole filing process.
Frequently Asked Questions
The IRS set the business standard mileage rate at 72.5 cents per mile for January 1 through June 30, 2026, and raised it to 76 cents per mile for July 1 through December 31, 2026. You use the rate that applies to the date you drove each mile, which is why this calculator lets you split your miles between the two halves of the year.
You need adequate records that show, for each business trip, the date, the destination or business purpose and the miles driven, plus the total miles you drove the vehicle for the year. The IRS expects them to be made at or near the time of the trip. A paper log, a spreadsheet or a mileage tracking app can all work if they capture those details.
Generally no. Ordinary commuting between your home and a regular workplace is a personal expense. Miles driven for a delivery, a ride or a business errand are business miles, and some trips from a home that is your principal place of business can qualify. Because the rules depend on your situation, ask a tax professional about miles driven while waiting for orders or ride requests.
Parking fees and tolls for business trips are deductible in addition to the standard mileage rate. Gas, oil, repairs, tires, insurance, registration and depreciation are already built into the rate, so you cannot deduct them separately for the same vehicle. If you choose the actual-expense method instead, you deduct the business share of those costs and keep receipts for all of them.
Often yes, but the first year matters. To use the standard mileage rate for a car you own, you generally have to choose it in the first year the car is used for business, and you can switch to actual expenses in a later year. Claiming accelerated depreciation or a Section 179 deduction on the car in an earlier year can rule out the standard rate. Ask a tax professional before choosing.
The calculator runs your earnings and expenses through the 2026 self-employment and income tax rules twice, once without the mileage deduction and once with it, and shows the difference. It assumes the gig income is your only income and uses an approximate state rate, so your real savings depend on your full return.
Disclaimer: this calculator provides estimates for educational purposes only and is not financial, tax or legal advice. Consult a qualified professional before making financial decisions.