| Standard rate, first half | 5000 miles × 72.5¢ | $3,625 |
| Standard rate, second half | 5000 miles × 76¢ | $3,800 |
| Standard mileage total | 10000 business miles | $7,425 |
| Business use percentage | 10000 of 20000 miles | 50% |
| Actual costs for the year | $7,200 running + $4,000 depreciation | $11,200 |
| Actual method deduction | $11,200 × 50% | $5,600 |
- The first year is the one that matters. Use the standard rate in the first year the car is in service and you may switch between methods later; use actual costs in that first year and this car is on actual costs for as long as you own it.
- Depreciation is what decides most of these, and it is the figure a rough answer usually omits. What you may claim depends on the car's cost, when it went into service, section 179 and the luxury auto limits — so treat the number above as a comparison, not as a filing figure.
- Either method needs the same log: date, miles and purpose. Neither is available without one.
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The figures this uses
| Figure | 2026 | Source |
|---|---|---|
| 2026, January 1 to June 30 | 72.5 cents per mile | irs.gov |
| 2026, July 1 to December 31 | 76 cents per mile | irs.gov |
| The first-year choice | the standard mileage rate must be chosen in the first year the car is available for business use; choose actual expenses first and that car stays on actual expenses | irs.gov |
| What actual expenses include | fuel, oil, repairs, the insurance the state requires, registration, tyres and depreciation or lease payments, multiplied by the business use percentage | irs.gov |
How the calculation works
There are two ways to deduct a car used in business, and the calculator runs both on your figures.
The standard mileage rate.
- Business miles from January 1 to June 30, 2026, at 72.5 cents.
- Business miles from July 1 to December 31, 2026, at 76 cents.
- The two added together.
Actual costs.
- The business use percentage: business miles divided by all the miles the car was driven.
- A year of running costs, plus depreciation or lease payments.
- That total times the business percentage.
The larger of the two is the headline, with the difference beside it. Whichever you choose goes on Schedule C, line 9, with parking and tolls deducted on top of either.
Why the first year decides it
The comparison is not only about this year. The method you use in the first year a car is used for business limits every later year. Start on the standard rate, and you can move to actual costs in a later year when they are higher. Start on actual costs, and that car can never use the standard rate. For a new car the first-year choice is worth running with a realistic depreciation figure before you file. See the first-year choice.
What it leaves out
- Working out depreciation. You enter the figure. What you may claim depends on the car's cost, the date it went into service, section 179 and the limits on depreciation for passenger cars, which Publication 463 and the Form 4562 instructions set out.
- Business use of 50% or less, where the depreciation rules change and section 179 is not available, pulling the actual method further down than this comparison shows.
- More than one car, which are compared one at a time.
The mileage deduction calculator prices the standard rate alone, and the mileage log sets out the record both methods depend on.
Common questions
Can I switch methods from year to year?
What counts as the actual costs of a car?
Why does depreciation matter so much?
Do I need a log for the actual method?
This calculator is for educational purposes only and does not constitute tax, legal, or financial advice. It covers United States federal tax and simplifies in the ways noted beside each result. Consult a qualified tax professional about your situation.