How to Track Business Mileage for Tax Deductions in the US
If you use your vehicle for work, you may qualify for tax deductions that put money back in your pocket. The IRS mileage deduction lets you claim business-related driving expenses, potentially saving you hundreds or even thousands each year. But to benefit, you need to follow the rules and keep good records.
This guide is for anyone who drives for work—rideshare drivers, sales professionals, real estate agents, and business owners. We’ll cover which trips count, current mileage rates, easy tracking methods, required records, and how to claim your deduction.
Taking the Mileage Tax Deduction
The mileage tax deduction is a simple way to save money on your taxes when you use your car for certain activities. Instead of keeping track of every single car expense (like gas, oil changes, and repairs), you can just multiply your miles by the rate the IRS sets each year.
This deduction can really add up! If you drive 10,000 miles for business in 2024, you can multiply those miles by 67 cents per mile. That gives you a $6,700 deduction, which could save you about $1,600 if you’re in the 24% tax bracket.
To make the most of this tax break, you need to know three things: who can claim it, which trips count, and what records to keep. In the next sections, we’ll break down these details so you can claim every mile you deserve without worrying about IRS rules.
Who Can Take the Mileage Tax Deduction?
Different taxpayers can claim mileage deductions, but the rules vary based on your work situation:
Self-Employed People
If you work for yourself, you can deduct business miles on Schedule C of your tax return. This group includes:
- Freelancers and contractors
- Small business owners (sole proprietors)
- Partners in businesses
- LLC members
- Gig workers (like Uber drivers or DoorDash delivery people)
Small Business Owners with Corporations
If you own a business set up as a corporation (S-Corp or C-Corp), your options depend on vehicle ownership:
- If your company owns the vehicle: Your business deducts the actual expenses
- If you use your personal car: You can either get reimbursed by your business or handle it differently on your taxes
Regular Employees
From 2018 through 2025, employees cannot deduct unreimbursed mileage on their taxes due to recent tax law changes. Instead:
- Ask your employer to reimburse you for business trips
- Know that reimbursements up to the IRS rate aren’t counted as income
Other Situations
You might also claim mileage for:
- Medical trips (as part of your medical expense deduction)
- Volunteer work with qualified charities
- Moving (but only if you’re active-duty military moving due to orders)
IRS Mileage Deduction Rules
Knowing exactly which trips qualify for the mileage deduction helps you maximize your tax savings while staying within IRS guidelines.
Miles You Can Deduct
You can claim these business-related trips on your taxes:
- Driving between different work locations
- Traveling to meet clients or customers
- Trips to temporary work sites
- Business errands (like bank deposits or picking up supplies)
- Driving to business training or education events
- Travel to and from the airport for business trips
Miles You Cannot Deduct
The IRS won’t allow deductions for:
- Regular commuting between your home and main workplace
- Personal side trips during business travel
- Any miles your employer already reimbursed you for
- Non-business related driving, even if done during work hours
Special Situations
Several unique circumstances can affect your deductions:
- Home office advantage: If you have a qualifying home office, trips from your home to other business locations may count since your home is considered your main workplace
- Multiple jobs: Driving directly between different employers is deductible
- Temporary assignments: Travel to work sites expected to last less than one year qualifies
Records You Must Keep
Keeping detailed records throughout the year makes tax time much easier and protects you if the IRS ever questions your deduction. The IRS expects comprehensive documentation that includes:
- When you drove (date)
- Where you went
- Why the trip was for business
- Odometer readings or total miles driven
- Information about which vehicle you used
Tip! Using tracking tools like mileage apps or specialized software can streamline this process. Invoice Fly’s receipt scanner can help you capture and organize related travel receipts to support your mileage claims.
Standard Mileage Rates
The IRS updates standard mileage rates each year based on a comprehensive analysis of transportation costs—including fuel prices, maintenance expenses, insurance, and vehicle depreciation. For 2025, the IRS has announced these rates:
- Business miles: 70 cents per mile
- Medical or moving purposes: 21 cents per mile
- Charitable service: 14 cents per mile
For example, if you drive 5,000 business miles in 2025, your deduction would be $3,500 (5,000 × $0.70).
How Much is Employer Mileage Reimbursement?
While the IRS sets standard rates, employers are not required to reimburse employees at these exact rates:
- Many employers choose to use the IRS standard business rate for simplicity
- Employers may set their own reimbursement rates based on their policies
- Reimbursements up to the standard rate are not taxable income for employees
- Amounts exceeding the standard rate may be considered taxable wages
Some states (like California) require employers to reimburse employees for business travel expenses. Check your state laws to understand your rights regarding reimbursement.
Understanding exactly what the standard mileage rate covers helps you determine if this method is right for your situation. Let’s break down what’s included and what you can deduct separately.
What the 70-Cent Business Mileage Rate Includes
The 2025 standard rate of 70 cents per mile covers all these vehicle expenses:
- Gasoline and fuel costs
- Oil changes and routine maintenance
- Repairs and tire replacements
- Insurance premiums
- Vehicle registration fees
- Depreciation (based on average vehicle costs)
- Lease payments (if applicable)
Additional Expenses You Can Still Deduct
Even when using the standard mileage method, you can separately deduct:
- Parking fees for business purposes
- Toll road charges during business travel
- Interest on your car loan (for self-employed taxpayers only)
- Personal property taxes on your vehicle (if you itemize deductions)
Choosing Between Standard Rate and Actual Expenses
While the standard mileage rate offers simplicity, tracking actual expenses might yield a larger deduction in certain scenarios:
Consider the standard rate when:
- You drive many business miles throughout the year
- You have a fuel-efficient or economical vehicle
- You prefer simpler recordkeeping requirements
Consider tracking actual expenses when:
- You drive a larger, more expensive vehicle with higher costs
- You’ve had significant vehicle expenses (major repairs, high insurance)
- Your business mileage is relatively low compared to personal use
Applying the IRS Mileage Rate Deduction to Your Taxes
How you claim mileage deductions on your tax return varies based on your employment status. Let’s break down the process for different taxpayers.
For Self-Employed Workers
If you’re self-employed, follow these steps to claim your mileage deduction:
- Calculate your deduction by multiplying your total business miles by the 2025 rate of 70 cents per mile
- Report this amount on Schedule C, Part II, Line 9 as “Car and truck expenses”
- Complete Form 4562 for depreciation if required (typically for vehicles used less than 100% for business)
- Keep your mileage log in your records (don’t submit it with your return, but have it ready if the IRS asks)
Using digital tools like Invoice Fly’s reporting software can help generate accurate mileage reports that make tax filing much easier.
For Small Business Owners with Corporations
If your business is set up as a corporation (S-Corp or C-Corp):
- Create a compliant reimbursement plan that follows IRS “accountable plan” rules
- Reimburse yourself or employees for business mileage at the standard rate
- Report these reimbursements as business expenses on your corporate tax return
- Maintain detailed documentation for all mileage reimbursements
For Other Types of Mileage Deductions
For non-business driving:
- Medical trips: Report on Schedule A if you itemize deductions and if your total medical expenses exceed 7.5% of your adjusted gross income
- Charitable driving: Report on Schedule A under charitable contributions
- Moving (military only): Report on Form 3903, Moving Expenses
Special Tips for Self-Employed Taxpayers
Self-employed individuals should keep these points in mind:
- Home office benefit: With a qualified home office, trips from home to client locations become fully deductible
- Multiple work locations: Travel between different business locations counts as deductible miles
- Work-specific travel: Industry-specific travel (like real estate agents showing properties) qualifies
- Temporary assignments: Travel to temporary work locations (less than one year) is generally deductible
Maximizing Your Mileage Deduction
To get the most from your mileage deduction:
- Track consistently: Use a mileage app or detailed logbook to record every business trip
- Evaluate both methods: Compare the standard rate versus actual expenses to see which gives you a better deduction
- Combine business trips: Plan efficient routes to maximize business mileage when possible
Bill clients when appropriate: Consider using Invoice Fly’s invoice maker to include mileage charges when billing clients
Common Mileage Tracking Mistakes to Avoid
Keeping good mileage records is key if you want your tax deduction approved. Many people make simple mistakes that can lead to IRS rejection. Here’s what to watch out for:
Record-Keeping Mistakes
- Forgetting key details (dates, locations, or business purpose)
- Using round numbers instead of actual readings
- Only tracking sometimes instead of after every trip
- Writing vague notes like “meeting” instead of “client meeting at ABC Company”
Calculation Errors
- Using old mileage rates instead of 70 cents per mile (2025)
- Claiming both mileage and expenses it already covers (like gas)
- Switching between methods incorrectly (once you use actual expenses, you can’t switch to mileage later)
Eligibility Confusion (Claiming miles you shouldn’t)
- Regular drives between home and your main workplace aren’t deductible
- Personal errands during the workday don’t count as business miles
- You can’t deduct miles your employer already paid you back for
Tip! Using a good tracking app like Invoice Fly’s time tracking software helps maintain accurate, IRS-compliant records while simplifying the documentation process throughout the year.
How Can Invoice Help with Mile Tax Deduction?
Tracking your business mileage correctly can save you hundreds or even thousands on taxes each year. With the 2025 rate at 70 cents per mile, these savings add up fast for frequent drivers.
The key? Consistent, accurate records. Whether you use an app, a logbook, or a spreadsheet, be sure to note the date, destination, purpose, and miles driven.
Self-employed workers and small business owners can simplify tax time by linking mileage tracking to their business systems. Tools like Invoice Fly help you manage all your business expenses in one place, making tax preparation more straightforward.
Don’t wait until tax season to start tracking your miles! Set up your tracking system today, and you’ll thank yourself when it’s time to file your taxes.
Download Invoice Fly today!
Mileage Tax Deduction FAQs
Yes, but only for the business portion. If you meet a client, then go shopping, only the miles for the meeting count. Keep clear records of when business driving ends.
You can rebuild records using your calendar, maps, and work schedules. The IRS prefers daily logs, but reconstructed records may work—just expect extra scrutiny if audited.
Only miles driven while the app is on and you’re working count. Driving home after your last delivery isn’t deductible. A mileage tracking app makes this easier.
