You can deduct vehicle costs in two ways: the standard mileage rate or the actual expense method. This guide covers the mileage method.

Step 1. Track every business mile

  • Use a mileage tracking app (e.g., MileIQ, QBO only if using QBO already) or a paper log/ Google sheet.
  • Record date, purpose, starting and ending odometer readings for each trip.
  • Keep the log all year; it's the backbone of the deduction.

2. We'll apply the 2026 rate for you at year end

  • 2026 IRS rate: 72.5 ¢ per mile.
  • When we prepare your return, we'll multiply your total logged business miles by 72.5 ¢ to calculate the deduction.

Example for illustration: 12,000 business miles × $0.725 = $8,700 deductible mileage expense.

3. Reimburse through the business (if personally owned)

  • Submit your mileage log under your accountable plan (see our Step-by-Step Guide to Implementing a Mileage Reimbursement Accountable Plan for the plan document and deadlines).
  • The company reimburses you for the deductible amount; the reimbursement is non taxable to you and fully deductible to the business.
  • If the vehicle is titled to the business, just record the mileage deduction in the company books.

Still deductible separately: business parking fees and tolls, and, for the self-employed, the business-use share of car loan interest. (W-2 employees cannot deduct car loan interest as a business expense.)