How to Track Mileage for Business Tax Deductions

For many small business owners, freelancers, and self-employed professionals, driving is a regular aspect of their work. Client meetings, job site visits, supply runs, and deliveries can quickly add up to hundreds or even thousands of business miles each tax year. When tracked correctly, those miles can translate into a valuable tax deduction. When tracked poorly or not at all, they often turn into missed savings or an audit risk.

Understanding how to track mileage for business tax deductions is one of the simplest ways to reduce your tax bill while staying compliant with Internal Revenue Service (IRS) rules. This guide walks you through what qualifies as business mileage, why tracking matters, the deduction methods available in 2026, and the tools and best practices that make the process manageable year-round.

Key Highlights

• Business mileage tracking includes trips for client meetings, deliveries, and work-related errands, but not your regular commute.

• The IRS requires detailed mileage logs that show dates, locations, miles driven, and business purpose.

• You can deduct mileage using either the standard mileage rate or the actual expense method.

• Consistent, contemporaneous tracking helps maximize deductions and protect you in the event of an audit.

• Mileage apps and integrated bookkeeping tools simplify recordkeeping for busy business owners.

What Counts as Business Mileage for Tax Deductions

Business mileage tax deductions refer to miles driven for ordinary and necessary business-related trips and activities. The IRS draws a clear line between deductible business use and non-deductible personal driving, so understanding the difference is essential.

Deductible business mileage examples

In general, business miles include travel such as:

• Driving from your office or home office to meet clients or customers

• Traveling between job sites or work locations on the same day

• Running business-related errands like purchasing supplies or visiting the bank

• Driving to attend conferences, networking events, or training sessions

The IRS outlines these guidelines under its business use of car rules, which explain when vehicle expenses qualify for deductions.

What does not count as business mileage

Not all driving is deductible. The most common non-deductible miles include:

• Commuting from home to your regular office or primary workplace

• Personal errands or family-related trips

• Vacation or leisure driving

Even if you take a work call during your commute, those miles still count as personal commuting and cannot be deducted. This distinction is one of the most common areas where business owners make mistakes, so it is worth being precise.

Why Mileage Tracking Matters

Mileage tracking is not just about finding deductions. It is also about documentation, accuracy, and risk management.

IRS documentation requirements

The IRS expects business owners to maintain adequate records to support deductions, including for mileage. Without proper logs, deductions can be reduced or disallowed entirely during an audit. According to IRS guidance, mileage records should be created at or near the time of the trip, not reconstructed months later.

This is where many taxpayers run into trouble. Detailed logs meet IRS standards, while the following do not: 

• Estimates

• Calendar guesses

• Vague notes

Financial impact of accurate tracking

Accurate tracking can significantly increase your deductible expenses. For businesses that rely heavily on driving, mileage deductions can add up to thousands of dollars each year. Overlooking trips or underreporting miles means leaving legitimate tax savings on the table.

Consequences of poor recordkeeping

Poor mileage records can lead to:

• Reduced deductions during an audit

• Additional taxes owed, plus interest

• Penalties for inaccurate reporting

Keeping clean records is a simple way to protect your business and reduce stress during tax season.

IRS Mileage Deduction Methods

The IRS allows two methods for deducting business vehicle expenses. Each method has its own:

• Rules

• Benefits

• Limitations

Standard Mileage Rate

The standard mileage rate is the most common option used by small business owners.

Under this method, you multiply your total business miles driven during the year by the IRS standard mileage rate. For 2026, the standard mileage rate is 72.5 cents per mile for business use, up from 2025, when the IRS mileage rate was 70 cents.

Pros of the standard mileage rate:

• Simple to calculate

• Minimal mileage deduction record keeping compared to the other method

• No need to track individual vehicle costs like gas or repairs

Cons of the standard mileage rate:

• May result in a smaller deduction for high-cost vehicles

• Must be elected in the first year the vehicle is used for business

Once you choose the standard mileage rate for a vehicle’s first year of business use, you may later switch to the actual expense method. However, the reverse is not typically allowed, which makes the initial decision to use the standard mileage rate all the more important.

Actual Expense Method

The actual expense method allows you to deduct the business portion of your vehicle’s operating costs.

Eligible actual car expenses include:

• Fuel

• Maintenance and repairs

• Insurance

• Registration fees

• Depreciation or lease payments

• Parking fees

Under this method, you calculate the percentage of total miles driven that were for business and apply that percentage to your total vehicle expenses. If your vehicle is used exclusively for business purposes, no calculation is required. 

Pros of the actual expense method:

• Can produce larger tax deductions than the standard mileage rate method for expensive or heavily used vehicles

• Captures a broader range of costs

Cons of the actual expense method:

• Requires more detailed recordkeeping

• More time-consuming to calculate

• Must track and store receipts to conform to tax laws and rules

Choosing the best method

The best method to reduce your taxable income depends on your specific situation. Factors to consider include:

• How many miles you typically drive for business

• Your car expenses and operating costs

• How much time you want to spend on recordkeeping for business expenses

Many business owners calculate both methods each year and choose the one that produces the larger deduction, when allowed. A tax professional can help you evaluate the numbers and avoid costly mistakes, so you can confidently use the optimal method for your business. 

IRS Mileage Log Requirements

Keeping a mileage log is not optional if you plan to deduct business mileage. The IRS has clear expectations for what those records should include.

What to record

A compliant mileage log should include:

• Date of each trip

• Starting location and ending location

• Business purpose of the trip

• Number of business miles driven annually 

Some business owners also record odometer readings at the start and end of the year. While not required for every trip, total annual mile odometer readings help support the accuracy of your records.

How long to keep records

The IRS generally recommends keeping tax records for at least three years from the date you file your return. If income is underreported or other issues arise, the window can be extended.

Storing mileage logs and supporting documentation in both digital and physical formats when possible is a best practice. Secure cloud storage adds an extra layer of protection against data loss.

Tools and Techniques for Tracking Mileage

There is no single right way to track mileage. The best option is the one you will actually use correctly and consistently.

Manual mileage logs

Manual tracking can be as simple as a notebook in your glove compartment or a spreadsheet on your computer.

Benefits:

• Low cost or free

• Easy to customize

Limitations:

• Easy to forget entries

• More prone to errors

• Time-consuming to maintain

Manual logs work best for business owners with low mileage or highly structured schedules.

Mileage tracking apps

Mileage tracker apps for taxes automate much of the tracking process using GPS technology.

Common mileage tracking features include:

• Automatic trip detection

• One-click classification of business vs. personal trips

• Cloud backups and exportable reports

Apps reduce the burden of remembering to log trips and create more reliable records.

1-800Accountant’s easy-to-use bookkeeping platform, ClientBooks, allows users to connect bank accounts, send invoices, upload receipts, and track mileage within an integrated system. This can simplify recordkeeping by keeping financial data in one place.

Integration with accounting software

When mileage tracking is integrated with your bookkeeping system, tax preparation becomes easier and more efficient. Data flows directly into your financial reports, reducing errors and saving time.

If you already use professional full-service bookkeeping, integrating mileage tracking into that workflow ensures nothing falls through the cracks.

Best Practices for Mileage Tracking

Even the best tools only work when paired with good, consistent habits and processes.

Track trips contemporaneously

Log trips as close to the time they occur as possible. The IRS favors contemporaneous records over reconstructed logs created months later, which may increase audit risk. 

Separate business and personal use

Clearly distinguish between business and personal trips. Mixing the two without clear notes creates confusion and weakens your records.

Back up your data

Use both digital and physical backups whenever possible. These backups all help protect your records, including: 

• Cloud storage

• External drives

• Printed summaries

Common Mileage Tracking Mistakes

Many business owners lose deductions or create audit risk due to simple errors. Avoid these common tracking mistakes:

• Waiting until year-end to estimate mileage

• Forgetting to document the business purpose of trips

• Missing start or end locations

• Failing to reconcile mileage totals with odometer readings

Avoiding these mistakes often comes down to consistency and using the right tools.

How 1-800Accountant Can Help

Mileage tracking is only one piece of a larger tax strategy. When combined with accurate bookkeeping and proactive tax planning, it can play a meaningful role in reducing your overall tax burden.

1-800Accountant, America's leading virtual accounting firm, helps small business owners set up reliable recordkeeping systems, maintain compliant mileage logs, and choose the most beneficial deduction method. With year-round support from experienced accounting professionals, you gain clarity and confidence at tax time and throughout the year.

Schedule a free 30-minute consultation for help maximizing mileage deductions, improving your bookkeeping, or planning ahead for tax savings. Working with a dedicated accounting team for an affordable, tax-deductible fee can make all the difference.