Mileage Deduction

Who can claim a mileage deduction?

If you are an employee, a sole trader or a business owner you might be eligible for a mileage deduction.

As an employee, you can claim a mileage deduction if your employer doesn’t reimburse you for your business vehicle expenses.

As self-employed you can claim all your car expenses in connection to conducting your business.

As a business owner, you can claim a deduction for the mileage payments you have made to your employees.

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How does mileage deduction work?

The IRS sets a standard mileage rate each year that you can use to claim deductions based on the number of miles you’ve driven throughout the year. A mileage deduction based on the standard rate reimburses you for the car-related expenses of owning and operating your vehicle for the business portion of its use.

So, if you drive a vehicle solely for business, you will be able to get a mileage deduction for every mile you’ve driven throughout the year. If you drive your vehicle for business 50% of the time, you will be able to claim a mileage deduction for 50% of your miles driven and so on.

If you are self-employed, you can instead get a mileage deduction based on the actual expenses for owning and running your vehicle. Learn more about self-employed mileage deductions.

You will need to keep IRS-compliant records in order to claim a mileage deduction. You are required to log every trip you take, including its date, the mileage you’ve driven, the purpose of the journey and the total mileage for the year. In case the IRS audits you over your tax claims, these records will be vital in demonstrating how you calculated your mileage deduction.

Learn more about mileage deductions in the US according to your situation in our comprehensive IRS mileage guide.

Located outside of the US? See our other mileage guides:

FAQ

Can I write mileage off on my taxes?

If you drive your personal vehicle for business-related purposes, you will be able to write off mileage at tax time. Note that currently employed individuals are not able to claim mileage according to the US tax Cuts and Jobs act.

Can you claim both gas and mileage?

No - you can either claim mileage by the IRS standard mileage rate, which covers all costs of owning and driving your vehicle, or claim your actual expenses driving your vehicle for business purposes.

Is it better to write off gas or mileage?

This will depend on your vehicle and preferences of the method. Writing off mileage by the standard IRS mileage method requires less documentation and hence is simpler. However, if you own a vehicle that has a high road tax, or uses a lot of fuel, writing off the gas and other expenses can give you a higher tax deduction and actually cover your business mileage costs. Note that writing off gas and other expenses will require you to keep all car expenses receipts throughout the year.