How To Deduct Mileage for Self-Employed Taxes

by W D Adkins ; Updated July 27, 2017
Odometer

The Internal Revenue Service offers some options that make it fairly easy for self-employed taxpayers to deduct business-related mileage. It’s common for a self-employed person to use a vehicle for both personal and business transportation. That’s okay with the IRS, but you must keep accurate records of your work-related driving. You can claim only the mileage attributable to business purposes.

Business Standard Mileage

The simple way to deduct business mileage or mileage reimbursements paid to employees for work-related travel is to use the IRS standard mileage rate. This rate is adjusted each year by the IRS to approximate the average cost of operating a motor vehicle. The 2015 standard rate was 57.5 cents per mile. The IRS factors in all the costs of driving when determining this rate, so there is no need to keep detailed records of other car-related expenses if you use this method. All you have to do is adequately document the number of miles driven for business purpose.

Logging Mileage

The usual method of recording business mileage is to keep a mileage log. No particular format is required. Start the log by making a note of the odometer reading on January 1, or the first day the vehicle is used for business purposes. End the log with the odometer reading on December 31. Each business trip requires an entry that includes the date and the starting and ending odometer readings. Write down the reason for the trip and where you went. If you use the standard rate, all you need to do at year’s end is total the mileage and multiply by the standard rate. Claim the mileage deduction on Schedule C, Form 1040.

Miles That Count -- and Don't

If you work somewhere besides your home, don’t include commuting miles to and from your regular work location. The IRS doesn’t consider this a business expense. However, if you work out of your home, business trips can start from there. Drive a direct rout with no side trips except for business purposes. For example, you can count a detour to make a business bank deposit but not a deposit to your personal checking account. Travel between job sites is allowable mileage. Other examples of eligible mileage include trips starting from your place of business to meet clients, pick up supplies or make deliveries.

Actual Expenses and Mileage

Claiming actual vehicle operating expenses may be worthwhile if your vehicle costs more to drive than the standard rate allows. You can’t use the standard rate for business travel if you operate more than four vehicles, or if you used actual expenses in a previous year and included accelerated depreciation. You have to keep records of all the money you spend on the car. Typical costs include: Gas and oil Repairs and maintenance Lease payments or car loan interest Depreciation Insurance, registration and ad valorem taxes Parking and toll fees You must keep a mileage log. Claim only the portion of actual expenses equal to the percentage of miles driven for business purposes. For instance, if 80 percent of the car’s mileage was business-related, you may deduct 80 percent of operating expenses.

About the Author

Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.

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