Learn the IRS rules for deducting your mileage on your tax return, including how to choose a mileage method, what records you need, and how to claim the deduction at tax time.
What Is the Mileage Rate for 2021?
Businesses often use these rates to reimburse employees for using their personal vehicles for job-related travel. If you’re self-employed, you can use them to determine your own deduction.
How To Calculate Mileage for Taxes
There are two ways to calculate your mileage for your tax return: using the standard mileage rate or calculating your actual costs.
Standard Mileage
The standard mileage rate is a simplified way of deducting your mileage. It is based on the number of miles driven instead of your actual costs. You keep track of your miles driven for IRS-approved purposes (business, medical activity, moving, or charitable work). Then, you multiply them by the correct mileage rate. For example, if you drove your vehicle 1,000 miles for IRS-approved business purposes in 2021, multiply 1,000 miles x $0.56 per mile. You’ll be able to deduct $560. To use the standard mileage rate for a car you own, you need to choose this method for the first year you use the car for business. You can then choose between deductions based on the standard mileage rate or actual costs in subsequent years. If you choose the standard mileage rate for a vehicle you’re leasing, you’ll need to stick with that method for the entire lease. If you choose this method, you’ll need to log your miles to calculate your deduction at the end of the year. Keep a written mileage log in your vehicle, or download a mileage app to keep track.
Actual Costs
You can choose to deduct the actual costs of using your vehicle instead of deducting your mileage. If you’re using a vehicle for both business and personal reasons, you can deduct only the costs for business use. You can include the following expenses:
GasOil, tires, and repairsInsuranceLicense and registration feesDepreciation of the vehicle or lease payments due to the percentage of miles you drive it for business purposes
You’ll need to keep records, such as receipts, to document your vehicle expenses. They will allow you to support your deduction in case you’re audited. You should keep old tax records for at least three years after you’ve filed your return.
Who Can Deduct Mileage for Business?
You can’t claim business mileage deductions for your commuting expenses between your home and your regular place of work. Your employer may reimburse you for some job-related travel, such as if you drive from your primary work location to meet with clients. However, you aren’t allowed to deduct mileage that your employer doesn’t reimburse you for. Under the TCJA rules, the itemized deduction for unreimbursed employee expenses was suspended from 2018 to 2025. The only exceptions are for:
Military reservistsState and local employees paid on a fee basisPeople who have job expenses related to an impairmentSome performing artists
The rules are different if you’re self-employed, though. You still can’t deduct your mileage if you commute from your home to your primary business, but you can if you’re traveling from your business to meet with clients or visit a project site, even if your business is based out of your home. The tax rules for ride-share drivers are similar. Ride-share drivers can deduct mileage according to the standard IRS rate or their actual costs.
Who Can Deduct Mileage for Moving?
You can deduct your mileage when moving only if you’re active-duty military and you’ve been ordered to a permanent change of station. Otherwise, this mileage deduction isn’t allowed. The TCJA suspended the deduction of moving expenses for all nonmilitary taxpayers from 2018 until 2025.
Who Can Deduct Mileage for Medical Reasons?
You can take a medical tax expense deduction only if your overall unreimbursed medical costs exceed 7.5% of your adjusted gross income (AGI). You can deduct your mileage at the standard rate of 18 cents per mile for 2022 and 16 cents per mile for 2021, or you can deduct your actual costs of gas and oil. Deducting parking costs and tolls is also allowed. You’re allowed to deduct mileage for your own treatment. You can also claim this deduction if you’re transporting a child to receive treatment or visiting a mentally ill dependent as part of a recommended treatment.
Who Can Deduct Mileage for Charitable Reasons?
If you travel to perform volunteer work, you can deduct the standard amount for the year. Alternatively, you can deduct your costs of oil and gas but not other vehicle expenses like depreciation, maintenance, insurance, and fees.
How To Claim Mileage on Your Taxes
If you’re claiming a deduction for business mileage, you’ll report it using Schedule C on Form 1040. To claim mileage deductions for moving, medical treatment, or charitable deductions, you’ll need to itemize on your return. You’ll do so using Schedule A on your Form 1040. No matter what type of mileage you’re deducting, be sure to keep thorough records. Keep a mileage log if you use the IRS standard mileage rate, or hold onto receipts if you’re deducting your actual costs. Be sure to store them with your other tax records so you’ll be covered in the event of an audit.
