Mileage deduction for freelancers: standard rate vs actual expense

Driving you do for work is deductible. Driving you do to get to a regular place of work — commuting — is not. The gray zone in the middle is where most freelancers either over-claim and create audit risk, or under-claim and leave real money on the table.

The two methods

Standard mileage rate

The IRS publishes a single per-mile rate that’s supposed to cover gas, insurance, depreciation, oil changes, tires — everything. For 2026 it’s $0.70/mile for business use.

You multiply business miles × rate and deduct the result. Done.

Actual expense method

Track every car-related cost for the year — gas, insurance, registration, maintenance, depreciation, lease payments. Multiply by the business-use percentage (business miles ÷ total miles). That’s your deduction.

More work, but for some people significantly more deductible. The crossover usually depends on:

• How expensive the car is to own (luxury / SUV → actual usually wins)
• How fuel-efficient it is (gas-sipper → standard usually wins)
• Business-use percentage (very high % → actual can win)

The trap: you have to choose in year one

If you use standard mileage in the first year you place a vehicle in service, you can switch between methods later. If you use actual in year one, you’re locked into actual for the life of that vehicle. So most accountants tell new clients to default to standard in year one — it preserves optionality.

What counts as a business mile

• Drives between business locations (client A to client B)
• Drives from home to a temporary work location (if you have a home office)
• Errands directly tied to the business — supply runs, post office, bank, picking up materials
• Driving to meet clients, vendors or networking

What doesn’t count

• Commuting — home to a regular place of work, even if that’s a coffee shop you go to every day.
• Personal errands tacked onto a business trip — only the business portion is deductible.
• Driving to attend continuing-education classes if you’d be doing them as a hobby anyway.

The log you actually have to keep

The IRS requires a contemporaneous log of business mileage. Per drive you need:

• Date
• Starting and ending location (city is fine; full addresses are stronger)
• Business purpose
• Miles driven

Contemporaneous means “at or near the time of the drive,” not reconstructed in April from a calendar. Apps like MileIQ, Everlance and Hurdlr auto-log via GPS, which removes the friction almost entirely. A spreadsheet kept honestly also works.

Beginning-of-year odometer reading

On January 1 (or whenever you place the car in service), record the odometer. Do the same on December 31. Total miles − business miles = personal miles. The ratio is what unlocks the actual-expense method and what backs up the standard-method claim in an audit.

How big a deduction is this, really?

Realistically, a freelancer who drives 4,000 business miles a year at $0.70/mile gets a $2,800 deduction. For someone in a 22% federal + 13% SE tax position, that’s about $980 of tax saved. Not life-changing, but it’s a thousand dollars for keeping a log.

Parking, tolls and other car costs

Parking fees and tolls related to business drives are separately deductible — on top of the mileage rate. Don’t forget them. Garage parking at home is personal; parking at a client’s office building is business.

Track mileage in your bookkeeping system or a dedicated mileage app — and reconcile both monthly. RevTrackr lets you log mileage as a transaction tied to a specific business so it rolls into the same Schedule C category you’ll need at year-end.