2026 IRS Standard Mileage Rate
The 2026 IRS standard mileage rate for business driving is 70 cents per mile. This rate covers all vehicle costs: gas, oil, insurance, registration, repairs, and depreciation. You simply multiply your business miles by 70 cents to calculate your deduction — no receipts for individual expenses required.
For business owners and self-employed individuals across all industries, see KDA's Business Owners page for comprehensive vehicle and business expense strategy.
Standard Mileage Rate vs Actual Vehicle Expenses
You have two options for deducting vehicle expenses: the standard mileage rate or actual vehicle expenses. The standard mileage rate (70 cents/mile in 2026) is simpler — multiply business miles by the rate. Actual expenses require tracking every dollar spent on gas, insurance, registration, repairs, tires, and depreciation, then multiplying by your business-use percentage.
The standard rate is generally better for: high-mileage drivers, drivers of fuel-efficient or older vehicles, and anyone who values simplicity. Actual expenses are generally better for: drivers of expensive vehicles, drivers with high insurance costs, and those who drive relatively few miles but have high vehicle costs.
If you want to use actual expenses in any future year, you must use actual expenses in the first year the vehicle is placed in service for business. If you use the standard mileage rate in year one, you can switch to actual expenses in later years. If you use actual expenses in year one, you cannot switch to the standard mileage rate.
What Miles Qualify as Business Miles
Business miles include: driving between business locations, driving to client meetings, driving to the bank to deposit business funds, driving to the post office to mail business correspondence, driving to purchase business supplies, and driving to business-related appointments. Commuting miles — from your home to your regular office — are not deductible.
If your home is your principal place of business (home office deduction claimed), then all driving from home to business appointments is deductible — there is no commute because your office is at home. This is a significant benefit for self-employed individuals with a legitimate home office.
Mileage Log Requirements
The IRS and FTB both require a contemporaneous mileage log — a record created at the time of each trip, not reconstructed at year-end. The log must show: date, destination, business purpose, and miles driven for each trip. Apps like MileIQ, Everlance, and TripLog automatically track GPS-verified mileage and generate IRS-compliant reports.
The FTB is particularly strict about mileage logs in audits of self-employed individuals. A reconstructed log created at year-end is generally not accepted. If you cannot produce a contemporaneous log, the entire vehicle deduction can be disallowed.
California-Specific Vehicle Rules
California follows the federal standard mileage rate. California does not allow bonus depreciation on vehicles, so if you use actual expenses and depreciate your vehicle, you must use MACRS straight-line depreciation on your California return. California also has lower luxury auto limits for depreciation than the federal limits.
California's SDI (State Disability Insurance) does not affect vehicle deductions. However, if you are audited by the FTB and your vehicle deduction is disallowed, the FTB will also assess interest and penalties on the additional tax owed.
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