Mileage Deduction for Contractors: 2026 Rates and Rules
By BRIX Editorial Team · Updated
The mileage deduction lets self-employed contractors deduct the cost of driving a vehicle for business, either at the IRS standard mileage rate or by tracking actual expenses. For 2026 the business rate is 72.5 cents a mile for January through June and 76 cents a mile from July 1 through December 31. Commuting miles don't count.
Key takeaways
- 2026 standard mileage rate: 72.5¢ per business mile through June 30, 2026, and 76¢ from July 1, 2026, after the IRS raised it mid-year for fuel prices. The 2025 rate was 70¢.
- You choose between the standard mileage rate and actual expenses. For a vehicle you own, you must use the standard rate in the first year to keep the option later.
- You can't use the standard rate if you run five or more vehicles at the same time, or if you've claimed Section 179, bonus or accelerated depreciation on the vehicle.
- Trips from a qualifying home office or your shop to job sites are generally business miles. Home to your regular shop is commuting.
- Keep a log with date, miles, destination and business purpose, made at or near the time.
How the mileage deduction works for contractors
If you're self-employed and drive your own truck or van for the business, the cost of those business miles is deductible on Schedule C. That lowers income tax and self-employment tax. There are two ways to figure it, and the choice you make in the vehicle's first year can lock you in.
| Period | Business rate | Source |
|---|---|---|
| 2025 (full year) | 70¢ per mile | IR-2024-312 |
| January 1 – June 30, 2026 | 72.5¢ per mile | Notice 2026-10 (IR-2025-128) |
| July 1 – December 31, 2026 | 76¢ per mile | Announcement 2026-11 (IR-2026-29) |
Deduction = (Business miles Jan–Jun × $0.725) + (Business miles Jul–Dec × $0.76) + business parking and tolls
- Business miles
- miles driven for the business, from your log, not commuting or personal miles
- Parking and tolls
- business-related parking fees and tolls, deductible on top of the rate
Run your own numbers in the mileage deduction calculator.
Standard mileage rate vs. actual expenses
With actual expenses, you add up what the vehicle really cost (fuel, oil, repairs, tires, insurance, registration and license fees, and depreciation or lease payments) and deduct the business-use percentage. With the standard rate, you multiply business miles by the IRS rate and skip the receipts for operating costs (you still need the mileage log).
| Standard mileage rate | Actual expenses | |
|---|---|---|
| Records | Mileage log, plus parking and tolls receipts | Mileage log plus every vehicle receipt |
| Tends to win when | Fuel-efficient or older, paid-off vehicle; lots of miles | Expensive truck, high fuel and repair costs, or you want Section 179 or bonus depreciation |
| Depreciation | Built in (35¢ per mile for 2026) | Claimed separately; Section 179 and bonus allowed |
| Fleet of 5+ vehicles used at once | Not allowed | Required |
| Switching later | Owned vehicle: can switch to actual in later years (straight-line depreciation applies) | Can't switch to standard after claiming accelerated depreciation, Section 179 or bonus |
If you buy a heavy work truck and want to expense it with Section 179 or bonus depreciation, you're choosing actual expenses for that truck for good. If you lease, choosing the standard rate means using it for the whole lease, including renewals.
Which miles count as business miles?
The commuting rule is where contractors win or lose this deduction. Driving between your home and your regular place of business is personal commuting, no matter how far. But contractors often drive from home straight to job sites, and the IRS rules in Publication 463 treat that differently depending on your setup:
| Your situation | Home to job site | Between job sites, supply house, shop |
|---|---|---|
| Your home office qualifies as your principal place of business | Deductible: trips from home to other work locations in the same business | Deductible |
| You have a regular shop or office, and the job site is temporary (expected to last a year or less) | Deductible, regardless of distance | Deductible |
| No regular place of business, no qualifying home office | Deductible only if the temporary site is outside your metro area | Deductible |
| Home to your regular shop or yard | Not deductible (commuting) | Shop to job sites is deductible |
This is a big reason a home office matters for owner-operators: if it's your principal place of business, your first drive of the day is a business trip instead of a commute.
What your mileage log needs
The IRS requires adequate records made at or near the time of the trip. A log kept weekly counts as timely. For each business trip, record:
- Date of the trip.
- Miles driven (odometer readings or mapped distance).
- Destination: the customer address, supply house or job.
- Business purpose: "estimate, Smith water heater" is enough.
- Total miles for the year: odometer reading on January 1 and December 31, so you can show the business-use percentage.
Job records can back up your log. Invoices, dispatch records and calendar entries show where you were and why. The IRS also allows a representative sample: a full log for part of the year can support the whole year if you can show those periods are typical.
Mileage by trade
| Trade | Typical driving | Tip |
|---|---|---|
| HVAC | Service calls across a wide area, parts runs | Dispatch records make a strong backup log. |
| Plumbing | Emergency calls at all hours | Log late-night trips the next morning, while you remember them. |
| Roofing | Estimates, inspections, supply pickups, long drives to storm areas | Overnight storm work out of town may also qualify for travel and per diem. |
| Electrical | Multi-week projects plus service calls | A project expected to run more than a year isn't temporary. |
| Landscaping | Daily routes to recurring properties | Route software or a GPS app can produce the log for you. |
| Cleaning | Several homes or offices a day | Trips between client sites are always business miles. |
Common mistakes
- Using one rate for all of 2026. Miles driven from July 1 use 76¢; earlier miles use 72.5¢.
- Reconstructing the log in April. Logs rebuilt from memory are weak if you're audited. Use an app or your job records.
- Claiming 100% business use on the only vehicle the household has.
- Picking actual expenses in year one by accident by claiming bonus depreciation, then wanting the standard rate later.
- Running five or more trucks at once and using the standard rate. Fleets must use actual expenses.
See the full contractor tax deductions list, the contractor taxes guide, and how BRIX bookkeeping and tax help works.
Frequently asked questions
What is the IRS mileage rate for 2026?
For business use, 72.5 cents per mile for miles driven January 1 through June 30, 2026, and 76 cents per mile from July 1 through December 31, 2026. The IRS raised the rate mid-year in Announcement 2026-11 because of higher fuel prices. The 2025 rate was 70 cents.
Can contractors deduct mileage from home to a job site?
Often, yes. If your home office is your principal place of business, trips from home to job sites are deductible. If you have a regular shop, trips from home to a temporary job site are deductible regardless of distance. With neither, only temporary sites outside your metro area count.
Is it better to use standard mileage or actual expenses?
Standard mileage usually wins for efficient or older vehicles driven a lot. Actual expenses often win for expensive, heavy trucks, especially if you want Section 179 or bonus depreciation. Your CPA can compare both, but decide in the vehicle's first year.
Can I use the standard mileage rate for a work truck?
Yes. The standard rate covers cars, vans, pickups and panel trucks. You can't use it if you operate five or more vehicles at the same time, or if you've already claimed Section 179, bonus or accelerated depreciation on that truck.
What records do I need for the mileage deduction?
A log made at or near the time, showing the date, miles, destination and business purpose of each trip, plus your total miles for the year. A weekly log counts as timely. Invoices and dispatch records support it.
Can I deduct parking and tolls on top of mileage?
Yes. Business-related parking fees and tolls are deductible separately under either method. Parking at your own regular place of business is a commuting cost and isn't deductible.
Can a W-2 employee deduct work mileage?
Most employees can't deduct unreimbursed vehicle expenses on their federal return; the exceptions include Armed Forces reservists, qualified performing artists and fee-basis government officials. Employees should ask their employer for reimbursement under an accountable plan instead.
Related
- Can a Contractor Claim the Home Office Deduction?How a contractor who works at job sites can still claim a home office: the admin-work test, the $5 per sq ft method, garages and shops, and tools.
- What Is the Section 179 Deduction?2026 Section 179 limits ($2,560,000), the 6,000-lb truck and SUV rules, business-use test and income limit, with contractor truck and equipment examples.
- What Is Bonus Depreciation?100% bonus depreciation is permanent for property acquired after Jan. 19, 2025. How it works for trucks and equipment, and how it differs from Section 179.
- What Is Depreciation?How depreciation works for contractor trucks, tools and equipment: MACRS classes, the half-year rule, a year-by-year example and when to expense instead.
- How Does Per Diem Work for Construction Workers?How per diem works for traveling construction crews: tax home, the one-year rule, accountable plans, FY 2027 GSA rates and what owners can claim.
- Contractor Tax Deductions: The Complete List for 2026Every common tax deduction for self-employed contractors: vehicles, tools, subs, insurance, home office, meals and more, with 2026 limits and IRS rules.
- Mileage Deduction Calculator for Contractors (2026)Free 2026 mileage deduction calculator with both IRS rates (72.5¢ Jan–June, 76¢ July–Dec). Compare standard mileage vs. actual expenses for your truck.
- Taxes for Contractors: The 2026 Guide for Self-Employed Trades OwnersHow taxes work for self-employed contractors in 2026: SE tax, income tax, quarterly estimates, deductions, 1099s and payroll, with IRS sources.
- Bookkeeping for contractors that keeps your books tax-ready all yearContractor bookkeeping that stays current: categorized expenses, 1099 subcontractor tracking, sales tax and quarterly tax reminders, synced to QuickBooks.
- Quarterly Estimated Tax Calculator for Self-Employed Contractors (2026)Free 2026 quarterly estimated tax calculator for self-employed contractors. See your safe-harbor payment, each due date, and what to set aside.
Sources
- IRS: Standard mileage rates (2025 and 2026, including July 1, 2026 change) (checked October 12, 2026)
- IRS: IR-2025-128, IRS sets 2026 business standard mileage rate at 72.5 cents per mile (checked October 12, 2026)
- IRS: Internal Revenue Bulletin 2026-29, Announcement 2026-11 (76 cents from July 1, 2026) (checked October 12, 2026)
- IRS: Notice 2026-10, 2026 Standard Mileage Rates (35-cent depreciation component) (checked October 12, 2026)
- IRS: Topic No. 510, Business Use of Car (checked October 12, 2026)
- IRS: Publication 463 (2025), Travel, Gift, and Car Expenses (checked October 12, 2026)