Mileage Deduction

A mileage deduction lets eligible taxpayers, such as self-employed drivers, claim business vehicle costs on their tax returns. With the standard mileage method, they multiply qualifying business miles by the applicable IRS mileage rate.

For example, at a hypothetical rate of 70 cents per mile, 1,000 business miles would produce a $700 deduction. That reduces taxable income by $700; it does not reduce the tax bill by $700.

A deduction is different from reimbursement, which is money an employer pays an employee. Drivers must keep records supporting the business miles they claim.