Which Vehicle Deduction Method Is Right for You?
As a rideshare driver, delivery contractor, or self-employed professional, choosing between the standard mileage rate and actual expense method can make a significant difference in your tax savings. Our free calculator helps you compare both methods instantly using the 2025 IRS mileage rate of 70 cents per mile.
- Uses the official 2025 IRS standard mileage rate (70 cents/mile)
- Calculates actual expenses based on your vehicle costs
- Applies your business use percentage automatically
- Provides clear recommendation with side-by-side comparison
Simply enter your business miles and vehicle expenses below. Our calculator will show you which method gives you the larger deduction and help you maximize your tax savings.
Frequently Asked Questions About Mileage Deductions
Which method is better: standard mileage or actual expenses?
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The better method depends on your specific situation. Standard mileage (70 cents per mile in 2025) is simpler and often benefits those with fuel-efficient vehicles or high mileage. Actual expenses may be better if you have high vehicle costs, an expensive car, or significant repairs during the year. The key is to calculate both methods using this calculator and choose the one that gives you the larger deduction.
Can I switch between the standard mileage and actual expense methods?
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Yes, but with restrictions. If you use the standard mileage rate in the first year you use your car for business, you can generally switch between methods in later years. However, if you claim actual expenses with depreciation in the first year, you typically cannot switch to the standard mileage rate later for that vehicle. For leased vehicles, you must use the same method for the entire lease period.
What records do I need to keep for mileage deductions?
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For standard mileage: Keep a detailed mileage log with the date, destination, business purpose, and miles driven for each trip. For actual expenses: Keep all receipts for gas, insurance, repairs, maintenance, registration, and loan/lease documents. For both methods, track your total miles and business miles to calculate your business use percentage. Digital apps like MileIQ, Stride, or Everlance can automate mileage tracking.
What qualifies as business miles for tax purposes?
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Business miles include: driving to meet clients, traveling between work locations, going to business meetings, and for rideshare drivers, all miles driven while the app is on (including waiting for rides and driving to pick up passengers). Important: Commuting from home to a regular workplace does NOT count as business miles. Miles driven for personal errands are not deductible, even if done during work hours.
Does this calculator apply to Uber, Lyft, and DoorDash drivers?
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Absolutely! This calculator is specifically designed for rideshare drivers (Uber, Lyft), delivery drivers (DoorDash, Instacart, Grubhub, Amazon Flex), and all independent contractors who use their personal vehicle for business. As a gig worker, you're considered self-employed and can deduct vehicle expenses on Schedule C of your tax return. Many gig workers find that vehicle expenses are their largest deduction.
What is the IRS standard mileage rate for 2025?
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The IRS standard mileage rate for 2025 is 70 cents per mile for business use. This rate is set annually by the IRS based on studies of the fixed and variable costs of operating a vehicle, including gas, insurance, depreciation, maintenance, and repairs. For reference, the 2024 rate was 67 cents per mile, so the 2025 rate represents a 3-cent increase.
