Mileage Deduction Calculator for Contractors (2026)
By BRIX Editorial Team · Updated
The mileage deduction lets you write off business driving at an IRS rate per mile instead of tracking every vehicle cost. For 2026 the IRS set two business rates: 72.5 cents a mile for January through June and 76 cents for July through December. Multiply each half's business miles by its rate and add parking and tolls.
- Jan–June miles × 72.5¢
- $6,525
- July–Dec miles × 76¢
- $8,360
- Business parking and tolls
- $300
- Business-use share of the vehicle
- 76.9%
- Actual expense method (business share)
- $11,069
- Rough tax savings (bigger deduction)
- $5,486
The standard mileage rate gives you $4,116 more this year. At your bracket plus self-employment tax, a $15,185 deduction is worth roughly $5,486 in federal tax.
Key takeaways
- 2026 business standard mileage rate: 72.5 cents (Jan. 1 – June 30) and 76 cents (July 1 – Dec. 31). The 2025 rate was 70 cents.
- Business miles only: trips between job sites, to supply houses and to customers. Commuting to a regular workplace doesn't count, even with a truck full of tools.
- You can use the standard rate or actual expenses. To use the standard rate on a vehicle you own, choose it in the first year the vehicle is used for business.
- Business parking and tolls are deductible on top of either method.
- Keep a mileage log written at or near the time of each trip.
How do you calculate the mileage deduction for 2026?
Multiply business miles driven from January 1 to June 30 by 72.5 cents, multiply business miles from July 1 to December 31 by 76 cents, then add business parking fees and tolls. The IRS raised the rate mid-year in Announcement 2026-11, citing higher fuel prices, so your log needs to show which miles fall on each side of June 30.
Deduction = M₁ × $0.725 + M₂ × $0.76 + parking and tolls
- M₁
- business miles driven Jan. 1 – June 30, 2026
- M₂
- business miles driven July 1 – Dec. 31, 2026
- 1
Pull your mileage log.
Use a written log or a GPS mileage app. Each entry needs the date, where you went, the business purpose and the miles.
- 2
Split the year at June 30.
Total business miles for January–June and for July–December separately. If the year isn't over, estimate the rest from last year's pattern.
- 3
Multiply by each rate.
January–June miles × 72.5 cents; July–December miles × 76 cents.
- 4
Add parking and tolls.
Business parking and tolls are deductible on top of the standard rate. Parking at your regular workplace isn't.
- 5
Compare with actual expenses.
Enter your yearly vehicle costs and total miles. The calculator shows which method gives the bigger deduction this year.
How much is the mileage deduction worth?
| Business miles in 2026 | Jan–June half | July–Dec half | Deduction |
|---|---|---|---|
| 5,000 | $1,813 | $1,900 | $3,713 |
| 10,000 | $3,625 | $3,800 | $7,425 |
| 15,000 | $5,438 | $5,700 | $11,138 |
| 20,000 | $7,250 | $7,600 | $14,850 |
| 30,000 | $10,875 | $11,400 | $22,275 |
| 40,000 | $14,500 | $15,200 | $29,700 |
Which miles count as business miles for a contractor?
Business miles are trips you make for the business: from one job site to another, to the supply house, to a customer's home for an estimate, to the bank to deposit checks. Driving between your home and your main or regular place of work is commuting, and the IRS doesn't allow it no matter how far it is.
- Home office as principal place of business. If your home office qualifies as your principal place of business, trips from home to job sites and other work locations are generally deductible.
- Temporary job sites. If you have a regular shop or yard away from home, daily round trips from home to a temporary job site in the same trade are generally deductible, regardless of distance.
- Hauling tools. Carrying tools or ladders while commuting doesn't make the trip deductible. Extra costs, like renting a trailer, can be.
- Mixed trips. A stop at the supply house on the way home doesn't turn the whole commute into business miles.
Standard mileage rate vs. actual expenses: which is better?
The standard rate usually wins for fuel-efficient vehicles that rack up a lot of business miles. Actual expenses can win for a heavy, expensive truck with high fuel, insurance and repair costs, especially in the first year when depreciation is large. Run both in the calculator, but know the rules before you pick.
| Rule | What it means |
|---|---|
| Choose the standard rate in year one | For a vehicle you own, you must use the standard rate in the first year the vehicle is used in your business to keep the option later. |
| Leased vehicles | If you choose the standard rate for a leased vehicle, you must use it for the entire lease, including renewals. |
| Five or more vehicles | You can't use the standard rate if you operate five or more vehicles at the same time, as in a fleet. |
| Depreciation already taken | You can't switch to the standard rate on a vehicle after claiming Section 179, bonus depreciation or MACRS depreciation on it. |
| Parking and tolls | Deductible under either method. |
What records do you need for the mileage deduction?
Keep a log made at or near the time of each trip: date, destination, business purpose and miles, plus odometer readings at the start and end of the year. For 2026, also note the odometer on June 30 so you can split miles between the two rates. A phone app or your dispatch history can fill most of this in.
Common mistakes
- Using one rate for all of 2026. Miles from July 1 on use 76 cents, not 72.5 cents.
- Counting the commute. Home to your regular shop is personal, even if you drive a work truck.
- Reconstructing the log in April. A log rebuilt from memory is weak in an audit. Record trips as you go.
- Switching methods without checking. Claiming Section 179 on a truck rules out the standard rate on that truck later.
- Mixing personal and business on one card. It makes the actual-expense split harder to prove.
Frequently asked questions
What is the IRS mileage rate for 2026?
The 2026 business rate is 72.5 cents per mile for miles driven January 1 through June 30, and 76 cents per mile from July 1 through December 31. The IRS raised it mid-year in Announcement 2026-11.
Why are there two mileage rates in 2026?
The IRS set 72.5 cents in Notice 2026-10, then raised the rate to 76 cents for miles from July 1, 2026, citing higher fuel prices. Miles before July 1 still use the original rate.
Can I deduct mileage from home to a job site?
It depends on where your regular place of work is. If your home office is your principal place of business, trips from home to job sites are generally deductible. If you report to a regular shop or yard, home to a temporary job site in the same trade is generally deductible too, but home to the shop is commuting.
Can I take the mileage deduction and depreciation on my truck?
Not both. The standard mileage rate already includes an amount for depreciation. If you claim Section 179, bonus or MACRS depreciation on a vehicle, you can't use the standard rate for it later.
Is the standard mileage rate or actual expenses better for a work truck?
Run both. High-mileage, fuel-efficient vehicles usually do better with the standard rate. A heavy, expensive truck with large first-year depreciation often does better with actual expenses. The calculator compares the two for this year.
Does the mileage deduction reduce self-employment tax?
Yes, for sole proprietors. Mileage is a business expense on Schedule C, so it lowers the net profit that both income tax and self-employment tax are figured on.
Related
- Mileage Deduction for Contractors: 2026 Rates and Rules2026 IRS mileage rates for contractors (72.5¢, then 76¢ from July 1), standard vs. actual expenses, which trips count and what your mileage log needs.
- Section 179 Calculator for Trucks, Vans and Equipment (2026)Free 2026 Section 179 calculator for trucks, vans and equipment. Applies the $2,560,000 limit, $32,000 SUV cap, business use and 100% bonus depreciation.
- 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.
- Self-Employment Tax Calculator (2026)Free 2026 self-employment tax calculator for contractors. See your Social Security and Medicare tax, the deductible half, and what to save monthly.
- 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.
- 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.
- 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.
- 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 Taxes for Contractors: How They Work in 20262026 estimated tax due dates, who has to pay, the 90%/100%/110% safe harbors and how to size each payment, with a worked contractor example.
- How Much Should You Set Aside for Taxes When You're Self-Employed?How much of each payment a self-employed contractor should save for taxes, with 2026 federal examples at $50k, $90k and $150k of profit.
Sources
- IRS, Standard mileage rates (checked October 12, 2026)
- IRS Announcement 2026-11 (Internal Revenue Bulletin 2026-29), revised 2026 mileage rates (checked October 12, 2026)
- IRS news release IR-2025-128 and Notice 2026-10, 2026 standard mileage rates (checked October 12, 2026)
- IRS Topic No. 510, Business Use of Car (checked October 12, 2026)
- IRS Publication 463, Travel, Gift, and Car Expenses (checked October 12, 2026)