What a mile is worth
With the standard mileage rate, you deduct a set amount for every business mile instead of tracking gas, repairs and wear. The IRS rate for 2025 was 70 cents a mile; check the rate for your tax year, since it changes most years.
| Business miles in a year | Deduction at $0.70 | Tax it saves at a 30% set-aside |
|---|---|---|
| 5,000 | $3,500 | about $1,050 |
| 8,000 | $5,600 | about $1,680 |
| 12,000 | $8,400 | about $2,520 |
A tree crew, a mobile detailer or a junk hauler can pass 12,000 business miles without trying. That is why the log matters more than almost any receipt.
What counts as a business mile
- Driving from one job site to the next
- Supply runs: the hardware store, the dump, the chemical supplier
- Meeting a client to look at a job or give a quote
- Trips to the bank, the post office or the shipping store for the business
What usually does not count: commuting from home to a regular place of work, and personal stops on the way. If your home office is your main place of business, trips from home to job sites generally do count. When in doubt, ask a tax professional.
The four things to write down for every trip
| Date | From - to | Purpose | Miles |
|---|---|---|---|
| Mar 4 | Home - Oak Street Rentals | Job #1041 deck repair | 14 |
| Mar 4 | Oak Street - Home Depot - home | Materials for #1041 | 9 |
| Mar 6 | Home - 12 Pine Ct | Quote, fence job | 11 |
Write it the same day. A log rebuilt from memory in April is the kind the IRS questions. Many people also note the odometer at the start and end of the year so the business share of total miles is clear.
Standard rate or actual costs
You can deduct either the standard rate per mile or the actual costs of the vehicle (gas, insurance, repairs, depreciation) times your business share. The standard rate is simpler and often comes out better for a paid-off car or truck. Two rules worth knowing:
- With the standard rate, do not also deduct gas or repairs. Tolls and parking for business trips are still deductible on top.
- To use the standard rate for a vehicle you own, you generally have to choose it in the first year you use that vehicle for business.
Put the miles into your profit
The mileage deduction lowers your profit, and your profit sets your tax. Add your expected miles to your expenses before you work out what to set aside with the free self-employment tax calculator.
General information, not tax advice. Check the current IRS mileage rate and rules for your situation.
