Business Mileage Deduction Calculator

IRS standard mileage deduction rules for 2024

The IRS standard mileage rate is the simplified method for deducting vehicle costs incurred for business, medical, and charitable driving. Instead of tracking and deducting every actual vehicle expense (fuel, insurance, maintenance, depreciation), you multiply your qualifying miles by the applicable IRS rate to arrive at your deductible amount. For 2024, the IRS has set the business mileage rate at 67 cents per mile, the medical mileage rate at 21 cents per mile, and the charitable mileage rate at 14 cents per mile. These rates are updated periodically to reflect changes in the average cost of operating a vehicle.

The business mileage rate is by far the most valuable and is available to self-employed individuals, freelancers, business owners, and in some circumstances to employees who are not reimbursed by their employer for work-related travel. If you drive 8,500 business miles in a year at the 67 cents rate, your standard mileage deduction is $5,695. This deduction reduces your taxable income, not just your tax bill, so the actual tax saving depends on your marginal tax rate. At a 24 percent combined federal and state marginal rate, a $5,695 deduction saves approximately $1,367 in tax.

The medical mileage rate of 21 cents applies to miles driven for qualified medical purposes: travel to doctor appointments, hospital visits, and other medical care. It can only be claimed as an itemised deduction and is subject to the 7.5 percent of adjusted gross income floor that applies to medical expense deductions, which means only the portion above 7.5 percent of your AGI is actually deductible. The charitable mileage rate of 14 cents per mile is set by statute and applies to driving done in service of a qualifying charitable organisation. It is also an itemised deduction and is only available to taxpayers who itemise rather than taking the standard deduction.

Standard mileage rate vs actual expense method

The standard mileage rate is one of two methods available for vehicle deductions. The other is the actual expense method, which allows you to deduct the actual costs of operating the vehicle: fuel, oil, tyres, maintenance, insurance, registration fees, garage rental, and depreciation. You must choose one method and apply it consistently throughout the year for each vehicle, with some restrictions on switching methods in future years. The standard mileage rate is simpler to apply because it only requires tracking miles driven rather than every expense receipt. The actual expense method can produce a larger deduction for vehicles with high running costs or significant depreciation, but requires more documentation and calculation.

Commuting miles are not deductible

A common mistake is to include regular commuting miles as business miles. The IRS explicitly excludes commuting, defined as driving from your home to your regular place of business, from the business mileage deduction. However, driving from your home to a temporary work location, or from your regular workplace to another business location, does qualify. If you have a qualifying home office that serves as your principal place of business, then driving from your home office to client sites or other business locations is deductible because the home office is your regular place of business. Understanding these distinctions is important for claiming the correct amount without inadvertently overstating the deduction.

Mileage log requirements

To support a mileage deduction, the IRS requires contemporaneous records that document the business purpose of each trip, the destination, the date, and the number of miles driven. A mileage log, whether in a paper notebook or a mileage tracking app, is the standard documentation. The IRS is clear that reconstructed logs created at tax time from memory are insufficient: records must be kept at or near the time of each trip. Several smartphone apps (MileIQ, Everlance, TripLog) automate mileage tracking using GPS, making it straightforward to maintain compliant records without manual entry. Keeping a proper mileage log is one of the highest-return administrative habits for self-employed individuals and business owners who drive frequently for work.