# Mileage Deduction for Contractors: 2026 Rates and Rules

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.

> **2026 has two business mileage rates**
>
> The IRS set the 2026 business rate at **72.5 cents a mile** (Notice 2026-10, December 29, 2025), then raised it to **76 cents a mile** for miles driven **on or after July 1, 2026** (Announcement 2026-11, citing higher fuel prices). Use the rate in effect when the miles were driven. Checked October 12, 2026. This is general information, not tax advice.

## 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](https://www.brix.so/learn/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.

**IRS business standard mileage rates**

| 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) |

_Source: IRS Standard mileage rates page and IRB 2026-29. The charitable rate stays at 14¢; medical and military moving rose from 20.5¢ to 23.5¢ on July 1, 2026._

**2026 standard mileage deduction**

```
Deduction = (Business miles Jan–Jun × $0.725) + (Business miles Jul–Dec × $0.76) + business parking and tolls
```

Where:
- 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

> **Example: a landscaper's 2026 mileage**
>
> This is an illustrative example. A landscaping owner drives his own pickup between his home office, supply yards and customer properties. His log shows 9,000 business miles from January to June and 9,000 from July to December.
>
> Standard mileage: 9,000 × $0.725 = $6,525, plus 9,000 × $0.76 = $6,840. **Total: $13,365**, plus $240 of business tolls.
>
> He can also deduct the business share of interest on his truck loan as a self-employed person. And because 35¢ of each 2026 business mile counts as depreciation, his truck's tax basis drops by $6,300 (18,000 × $0.35) this year.

Run your own numbers in the [mileage deduction calculator](https://www.brix.so/tools/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).

**Which method tends to fit**

|  | 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 |

_Sources: IRS Topic No. 510; IRS Publication 463 (2025), chapter 4; IR-2025-128._

If you buy a heavy work truck and want to expense it with [Section 179](https://www.brix.so/learn/section-179-deduction) or [bonus depreciation](https://www.brix.so/learn/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:

**Is the trip deductible? (Publication 463, chapter 4)**

| 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 |

_A job site is temporary if the work is realistically expected to last, and does last, one year or less. Hauling tools doesn't turn a commute into a business trip, though extra costs like renting a trailer are deductible._

This is a big reason a [home office](https://www.brix.so/learn/home-office-deduction-for-contractors) 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

**Where mileage adds up in each 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](https://www.brix.so/learn/per-diem-for-construction-workers). |
| 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. |

_Illustrative patterns._

## 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.

BRIX keeps your jobs, customer addresses and schedule in one place and keeps vehicle expenses categorized in sync with QuickBooks, which gives you dated records to back up your mileage log. BRIX doesn't file taxes or give tax advice.

- [Scheduling and dispatch](https://www.brix.so/features/scheduling-dispatch): Assigns the right crew to the right job based on skills, location and availability.
- [Bookkeeping and tax help](https://www.brix.so/features/bookkeeping-taxes): Keeps expenses categorized, tracks 1099 subcontractors and sales tax, and reminds you of quarterly estimated tax dates. BRIX does not file taxes or give tax advice.
- [QuickBooks sync](https://www.brix.so/integrations/quickbooks): Syncs customers, invoices and payments with QuickBooks so the books match the jobs.

See the full [contractor tax deductions list](https://www.brix.so/learn/contractor-tax-deductions-list), the [contractor taxes guide](https://www.brix.so/guides/contractor-taxes), and how [BRIX bookkeeping and tax help](https://www.brix.so/features/bookkeeping-taxes) 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?](https://www.brix.so/learn/home-office-deduction-for-contractors)
- [What Is the Section 179 Deduction?](https://www.brix.so/learn/section-179-deduction)
- [What Is Bonus Depreciation?](https://www.brix.so/learn/bonus-depreciation)
- [What Is Depreciation?](https://www.brix.so/learn/depreciation)
- [How Does Per Diem Work for Construction Workers?](https://www.brix.so/learn/per-diem-for-construction-workers)
- [Contractor Tax Deductions: The Complete List for 2026](https://www.brix.so/learn/contractor-tax-deductions-list)
- [Mileage Deduction Calculator for Contractors (2026)](https://www.brix.so/tools/mileage-deduction-calculator)
- [Taxes for Contractors: The 2026 Guide for Self-Employed Trades Owners](https://www.brix.so/guides/contractor-taxes)
- [Bookkeeping for contractors that keeps your books tax-ready all year](https://www.brix.so/features/bookkeeping-taxes)
- [Quarterly Estimated Tax Calculator for Self-Employed Contractors (2026)](https://www.brix.so/tools/quarterly-estimated-tax-calculator)

## Sources

- [IRS: Standard mileage rates (2025 and 2026, including July 1, 2026 change)](https://www.irs.gov/tax-professionals/standard-mileage-rates) (checked 2026-10-12)
- [IRS: IR-2025-128, IRS sets 2026 business standard mileage rate at 72.5 cents per mile](https://www.irs.gov/newsroom/irs-sets-2026-business-standard-mileage-rate-at-725-cents-per-mile-up-25-cents) (checked 2026-10-12)
- [IRS: Internal Revenue Bulletin 2026-29, Announcement 2026-11 (76 cents from July 1, 2026)](https://www.irs.gov/irb/2026-29_irb) (checked 2026-10-12)
- [IRS: Notice 2026-10, 2026 Standard Mileage Rates (35-cent depreciation component)](https://www.irs.gov/pub/irs-drop/n-26-10.pdf) (checked 2026-10-12)
- [IRS: Topic No. 510, Business Use of Car](https://www.irs.gov/taxtopics/tc510) (checked 2026-10-12)
- [IRS: Publication 463 (2025), Travel, Gift, and Car Expenses](https://www.irs.gov/pub/irs-pdf/p463.pdf) (checked 2026-10-12)

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Written by BRIX Editorial Team. Last updated 2026-10-12. General information, not tax, legal or financial advice.
Canonical: https://www.brix.so/learn/mileage-deduction-for-contractors