This is not tax advice. It explains what the IRS publishes and what the calculator below computes from the numbers you type. Confirm everything with a tax professional. IRS text on this page was read on October 6, 2026. The IRS has not yet published the 2026 editions of Publications 463 and 946; their rules here come from the editions for 2025 returns. The 2026 rates come from Notice 2026-10 and Announcement 2026-11.
The short answer
- For 2026 the IRS standard mileage rate for business use of a car is 72.5 cents per mile. It was raised to 76 cents per mile for business miles on or after July 1, 2026, so one year of business driving is priced at two different rates.[1, 2]
- The other method the IRS describes is actual expenses: the business-use share of what the vehicle really cost to run. Pub 463 divides expenses by the miles driven for each purpose, so the share is business miles over total miles.[3]
- Pub 463 treats the two as a choice with rules. If you use the standard rate for a year, it says you do not also claim actual car expenses for that year, and that to use the standard rate for a car you own, it must be chosen in the first year the car is available for business use.[4, 5]
- This page describes both methods for self-employed people and businesses. Notice 2026-10 says the business rate "cannot be used to claim an itemized deduction for unreimbursed employee travel expenses," apart from a few groups it names, and Pub 463 says the same of an employee's actual car costs. If you drive for an employer, ask a tax professional whether any of this applies to you.[1, 6]
- Either way the IRS asks for records: miles, dates and amounts, kept at or near the time. Pub 463 is blunt about guesses: it says you cannot deduct "amounts that you approximate or estimate."[7]
- The calculator below compares the two methods on your own numbers. It is an estimate to talk through with a tax professional, not tax advice.
Who this is for
This guide is for people who use a vehicle or a machine for work: rideshare and delivery drivers, contractors, landscapers, farmers and owners of small fleets. If some of your miles or hours are for work, the records you keep during the year are what a tax professional will work from in the spring.
It explains what the IRS publishes and shows what a calculator computes from numbers you type. It is not tax advice, and ServiceSage is not a tax preparer. The IRS lets you choose between methods in some situations and not in others, and the rules differ for employees, the self-employed and businesses with several drivers. Ask your tax professional which method fits you.
The two methods in plain words
1. The standard mileage rate
- The IRS publishes a cents-per-mile rate each year for the business use of a car. The amount is business miles times that rate. In Pub 463, "car" includes a van, pickup, or panel truck.[8]
- The rate is the IRS figure "for the cost of operating your car for business use," and part of it stands in for depreciation: Notice 2026-10 treats 35 cents per mile of the 2026 business rate as depreciation; Announcement 2026-11 left that unchanged.[4, 1, 2]
- Pub 463 cautions that if you use the standard mileage rate for a year, you cannot also deduct your actual car expenses for that year. It lists depreciation, lease payments, maintenance and repairs, gasoline, oil, insurance and vehicle registration fees.[4]
- Two things sit outside the rate. Pub 463 says that, in addition to the standard mileage rate, business-related parking fees and tolls are allowed (parking at your place of work is a commuting cost and is not). It also says a self-employed person who uses the car in the business can claim the business-use share of car-loan interest even with the standard rate. Ask your tax professional whether either applies to you.[9, 10]
- Pub 463 says that if you want to use the standard mileage rate for a car you own, you must choose it in "the first year the car is available for use in your business." It says either method can be chosen in later years, but lists cases where the standard rate is not allowed, including a car on which a section 179 deduction, the special depreciation allowance or MACRS depreciation was claimed. For a leased car, it says the standard rate must be used for the entire lease period.[5, 11]
- Five or more at once: Pub 463 says that if you own or lease five or more cars used for business at the same time, you cannot use the standard mileage rate for any of them. Pub 463 adds that you are not using five or more cars at the same time if you alternate using them.[12]
2. Actual expenses
- This method adds up what the vehicle really cost to run during the year and takes the business-use share. Pub 463 lists actual car expenses as depreciation, licenses, gas, oil, lease payments, insurance, garage rent, tolls, registration fees, repairs, tires and parking fees.[13]
- Pub 463 says that if you use a car for both business and personal purposes, you "must divide your expenses between business and personal use," and that you can divide them by the miles driven for each purpose. Its own example: 12,000 business miles out of 20,000 total is 60%.[3]
- Depreciation has its own rules and limits for cars, trucks and vans (Pub 463 and Pub 946), which is why the calculator asks you to type in a figure instead of working one out.[14]
- This method depends on a record of every expense, so it needs a dated receipt for every cost.
| Standard mileage rate | Actual expenses |
|---|
| What you work from | Business miles x the IRS rate for the date they were driven | The business-use share (business miles / total miles) of what the vehicle cost to run |
| Added on top (per Pub 463) | Business parking and tolls; business share of car-loan interest if self-employed | The same two items: business parking and tolls (also on the Pub 463 actual-expense list) and, if self-employed, the business share of car-loan interest |
| Records that matter most | Dated business miles, total miles, the cost of the car | Everything on the left, plus every receipt for fuel, repairs, insurance, registration and fees |
| Rules to ask about | First-year choice; not available for five or more cars at once; not after section 179, the special depreciation allowance or MACRS on that car; leased cars: the whole lease | Depreciation rules and limits; the business-use share |
The 2026 rate changed in July - why that matters
The IRS set the 2026 business rate at 72.5 cents per mile in Notice 2026-10. Then, because of fuel prices, it raised the rate to 76 cents per mile for business miles on or after July 1, 2026 (Announcement 2026-11, in Internal Revenue Bulletin 2026-29).[1, 2]
| When the business miles were driven | Rate | IRS source |
|---|
| 2025 | 70 cents per mile | Pub 463 |
| 2026, January 1 to June 30 | 72.5 cents per mile | Notice 2026-10 |
| 2026, business miles on or after July 1 | 76 cents per mile | Announcement 2026-11 |
One year of business miles is no longer priced at one rate. Miles driven before July 1 get 72.5 cents; miles driven on or after July 1 get 76 cents. The calculation needs business miles in each half of the year, not just a yearly total.
Example: 6,000 business miles in each half comes to $4,350.00 + $4,560.00 = $8,910.00. Pricing all 12,000 miles at 72.5 cents would give $8,700.00, which is $210.00 less. The calculator below does this split for you.
Your odometer gives total miles for each half. Business miles need a dated record of work trips, because the date decides the rate.
What records the IRS says to keep
Pub 463, chapter 5, lists what you need to prove car expenses. For a car, Table 5-1 asks for:[7]
- the cost of the car and any improvements;
- the date you started using it for business;
- the mileage for each business use, and the total miles for the year;
- the cost of each separate expense and its date, the date of each use of the car, your business destination, and the business purpose.
Pub 463 says to record these at or near the time of the expense or use, because "a timely kept record has more value than a statement prepared later."[15]
It says a record prepared on a computer is considered an adequate record, and that you cannot deduct "amounts that you approximate or estimate."[7]
Equipment and machines: hours, not miles
Tractors, mowers, skid steers, excavators and generators do not run on road miles, and the standard mileage rate is published for cars (in Pub 463, a van, pickup or panel truck counts as one).[8]
Pub 946 says most types of tangible property (except land), "such as buildings, machinery, vehicles, furniture, and equipment," can be depreciated if it meets four requirements: you own it, use it in your business or income-producing activity, it has a determinable useful life, and it is expected to last more than one year. Pub 946 gives machines no mileage or hourly rate; it covers how their cost is recovered, including depreciation, the section 179 deduction and the special depreciation allowance. Which method applies to your machine, how fast, and under what limits is a question for your tax professional.[14]
What helps is the paperwork a tax professional will ask about: the purchase price and date, the hour-meter reading at the start and end of the year, hours by job, and every fuel and repair receipt. Machines are serviced by hours anyway, so ServiceSage tracks them by hours (and trucks by miles).
Why organised records make this easy
| What to log | When | What it feeds |
|---|
| Odometer reading | January 1, around July 1, and December 31 | Total miles for the year and for each half of the 2026 rate change |
| Work trips: date, miles, destination, business purpose | Each trip, or at least weekly | Business miles in each half; Pub 463 asks for the mileage of each business use |
| Fuel fill-ups | Every fill-up | The actual-expense total, and your real cost per mile |
| Repairs and maintenance | Each service | The actual-expense total, and the service history |
| Insurance, registration and fees | When paid | The actual-expense total |
| Car-loan interest | From the lender statements | Self-employed: the business share sits outside the standard rate per Pub 463. |
| Business parking and tolls | When paid | Added on top of either method per Pub 463 |
| Cost of the vehicle, date it started work, improvements | Once, then when it changes | Records Pub 463 lists for car expenses |
| Machines: hour-meter reading | January 1, December 31 and each service | Hours of use, and the maintenance schedule |
With dated entries the questions in the calculator take a minute to answer. Without them the answers are estimates, and Pub 463 says amounts that you approximate or estimate cannot be deducted.
Free calculator: standard mileage rate vs actual expenses
The calculator on this page does four things with the numbers you type. It prices your business miles from January 1 to June 30 at 72.5 cents each and your business miles from July 1 to December 31 at 76 cents each, and adds them. It divides your business miles by your total miles to get your business-use share. It multiplies your fuel, maintenance and repairs, insurance, registration and fees, and depreciation or lease payments by that share. Business parking and tolls are added to both sides. So is the business share of car-loan interest, which is for self-employed people (enter 0 if that is not you). Then it shows which total is larger and by how much. Business miles cannot be more than total miles.
Pub 463 itself suggests that people who qualify for both methods "figure your deduction both ways to see which gives you a larger deduction."[6]
What the estimate leaves out:
- An estimate for a conversation with your tax professional. It is not tax advice and not a tax return.
- It does not apply depreciation limits. Depreciation or lease payments are whatever figure you type in.
- It does not apply the first-year rule (Pub 463: to use the standard rate for a car you own, it must be chosen in the first year the car is available for business use), or the other cases where Pub 463 says the standard rate is not allowed, such as after a section 179 deduction or special depreciation allowance on the car.
- It does not apply the five-or-more-cars rule: with five or more cars in business use at once, Pub 463 says the standard rate is not available.
- It does not apply the employer-provided vehicle rule: Pub 463 says the standard mileage rate cannot be used for a vehicle your employer provides.
- Business parking and tolls are added to both methods because Pub 463 treats them as separate from the standard rate. The business share of car-loan interest is added to both because Pub 463 says a self-employed person who uses the car in the business can deduct it even with the standard rate; enter 0 if that is not you.
- It does not add the business part of state and local personal property tax on the vehicle, which Pub 463 also treats as outside the standard rate for a self-employed person. If your registration fee includes such a tax, ask your tax professional how to treat it.
How ServiceSage helps
- Free: log fuel fill-ups, repairs and odometer readings, get reminder emails before services are due, and store up to 5 documents per vehicle in the document vault. On Free, repair costs and fill-ups older than the latest 6 are kept but shown only on Pro. ServiceSage does not log individual work trips; business miles need your own dated trip log.
- Pro ($9/mo or $84/yr) adds cost tracking and already exports CSV files: the Maintenance Expense Report (logged services and costs for a date range) and the fuel log. A year-end summary that brings these numbers together for your tax professional is coming for the 2026 tax year; it is not available yet.
- ServiceSage does not give tax advice or prepare returns. It keeps the records that your tax professional works from.
(Free keeps every entry; seeing repair costs and your full fuel history needs Pro.)
Create a free account or see Pro pricing.
Sources
- IRS Notice 2026-10, 2026 standard mileage rates (72.5 cents; 35 cents treated as depreciation; section 3 on unreimbursed employee travel)
- IRS Announcement 2026-11, Internal Revenue Bulletin 2026-29 (76 cents for business miles on or after July 1, 2026)
- IRS Publication 463, chapter 4, "Business and personal use" (the 12,000-of-20,000-miles example)
- IRS Publication 463, chapter 4, "Standard Mileage Rate" (the 2025 rate, and the caution about actual expenses)
- IRS Publication 463, chapter 4, "Choosing the standard mileage rate"
- IRS Publication 463, chapter 4, "Car Expenses" (the two methods, the tip about figuring both, and employees)
- IRS Publication 463, chapter 5, "How To Prove Expenses" and Table 5-1
- IRS Publication 463, chapter 4, "Car Expenses" (what counts as a car)
- IRS Publication 463, chapter 4, "Parking fees and tolls"
- IRS Publication 463, chapter 4, "Interest" (under Standard Mileage Rate)
- IRS Publication 463, chapter 4, "Standard mileage rate not allowed"
- IRS Publication 463, chapter 4, "Five or more cars"
- IRS Publication 463, chapter 4, "Actual Car Expenses"
- IRS Publication 946, chapter 1, "What Property Can Be Depreciated?"
- IRS Publication 463, chapter 5, "Timely kept records"
Read the full guide and use the free calculator.