Updated for Tax Year 2025 — includes 2026 estimates and IRS-approved mileage rates.

📣 The Big Picture:

If you're using your personal or company car for business purposes, you're eligible for a juicy deduction—but only if you're tracking and applying it right. Whether you're a self-employed freelancer or an S-Corp shareholder, this guide breaks it down.

✅ What You Need to Know

• 2025 IRS Business Mileage Rate: 70¢ per mile
• 2026 Estimated Rate: 72¢ per mile
• Methods: Choose between Standard Mileage Rate or Actual Expenses
• Recordkeeping: Mileage logs are required to support your deduction

📊 Standard Mileage Rate vs Actual Expenses

1. Standard Mileage Method

This is the easy route. You multiply business miles by the IRS rate (70¢ in 2025). You can also deduct parking, tolls, and registration fees separately.

Note: To use this method, you must elect it the first year the car is placed in service. For leased vehicles, you must stick with this method for the entire lease term.

2. Actual Expenses Method

Add up business-use percentage of gas, insurance, oil, tires, maintenance, and depreciation (or lease payments). Choose this method if you have a high-cost or low-mileage vehicle.

💡 Mileage Rate Chart (Updated with 2026 Estimate)

🚘 Ownership Matters

Sole Proprietors: Deduct on Schedule C using either method.

S-Corps / C-Corps:

• If the business owns the vehicle, you must report personal use as employee income.
• If the employee (even you) owns it, reimburse mileage and deduct as business expense.

📥 Where to Report the Deduction

• Schedule C – Self-employed
• Schedule F – Farmers
• Form 2106 – Employees who qualify (e.g., Armed Forces, performers)

🧾 Pro Tips for Recordkeeping

• Use mileage tracking apps (like Zoho Expense, MileIQ, Everlance)
• Keep receipts for gas, maintenance, insurance, and repairs
• Document odometer at year-start and year-end

💬 Need Help?

We’ve got your back. Whether you’re a sole prop or an S-Corp, we’ll help you take every dollar the IRS legally allows.