Your tax savings
$3,142
From $8,400 deduction at 22% federal + 15.3% SE
Federal income tax saved
$1,848
The math
Miles × rate12,000 × $0.70
Total deduction$8,400
× combined tax rate37.3%
Tax savings$3,142
Standard mileage vs actual expense
The IRS lets self-employed taxpayers choose between two methods to deduct vehicle expenses:
Standard mileage (what this calculator uses)
Multiply business miles by the IRS standard rate. The rate already includes gas, insurance, depreciation, maintenance, and registration. You can’t deduct those separately if you use this method.
- Pros: Dead simple. Just track miles. No receipts needed.
- Cons: Lower deduction if you have a fuel-hungry truck or expensive vehicle.
- Best for: Most service trades, especially with 4-cylinder vans, smaller pickups, or used vehicles.
Actual expense method
Track every vehicle expense (gas, insurance, depreciation, repairs, registration) and deduct the business-use percentage of each.
- Pros: Higher deduction if you drive a fuel-hungry truck (F-250, big diesel) or your vehicle has high depreciation.
- Cons: Requires meticulous records, all receipts, and a vehicle log of personal vs business miles.
- Best for: Heavy-duty trucks, premium vehicles, vehicles dedicated 100% to business.
You can’t switch easily
If you used the actual expense method in year 1, you’re typically locked in for the life of that vehicle (with some exceptions for fully-depreciated leased vehicles). Pick carefully on year 1 with a new vehicle.
What counts as business miles
- Counts: Driving from your home office to a job site, between job sites, to suppliers, to client meetings, to bank/post office for business errands.
- Doesn’t count: Driving from home to your regular office (commuting). Personal errands. Side trips on a business route.
- Gray area: Picking up materials on the way to a job IS business; stopping for groceries on the way home from a job is not. The drive from supplier to job is business, then your remaining drive to home becomes personal.
The full formula
deduction = business_miles × IRS_rate
federal_savings = deduction × marginal_federal_bracket
SE_savings (if 1099) = deduction × 0.153 (up to $176,100 SS wage base in 2026)
total_savings = federal_savings + SE_savings
2026 IRS mileage rates
| Type of travel | 2026 rate |
|---|
| Business | $0.70 per mile |
| Medical or moving (military) | $0.21 per mile |
| Charitable | $0.14 per mile |
The IRS publishes new rates each November for the following calendar year. Always double-check at irs.gov for the current year before filing.
Track miles like a pro (avoid an audit)
The IRS expects a contemporaneous log: date, starting/ending odometer, miles driven, business purpose. Apps like MileIQ, Stride, or QuickBooks Self-Employed auto-track via GPS. The cheap option: notebook in the truck, log every business trip same-day.
Don’t reconstruct miles at year-end. The IRS rejects reconstructed logs in audits. Track as you drive.