Can contractors deduct mileage? 2026 IRS rules
Yes. If you own the business or work as an independent contractor, you can deduct the miles you drive for work, either at the IRS standard mileage rate or by deducting what the truck actually costs to run. For 2026 the IRS set two rates: 72.5 cents per mile for miles driven through June 30, and 76 cents per mile from July 1 on. So this year's mileage deduction is two calculations added together, and it only covers trips you can back up with a log.
Three rules trip up trades owners: the drive from home to your own shop is commuting, five or more vehicles on the road at once rules out the standard rate, and a truck you wrote off with section 179 or bonus depreciation can't go back to it.
The 2026 IRS mileage rate
The IRS raised the business rate in the middle of the year. Announcement 2026-11 set 76 cents per mile for miles driven on or after July 1, 2026. Miles from January 1 through June 30 keep the 72.5 cents per mile rate the IRS announced in December 2025. For 2025 returns, the rate was 70 cents per mile all year.
Split your 2026 log at June 30 and price each half at its own rate. Here's an example for an owner who drove a pickup 13,000 business miles:
| Period | Business miles | IRS rate | Deduction |
|---|---|---|---|
| Jan 1 to Jun 30, 2026 | 6,000 | 72.5 cents per mile | $4,350 |
| Jul 1 to Dec 31, 2026 | 7,000 | 76 cents per mile | $5,320 |
| 2026 total | 13,000 | $9,670 |
Price the whole year at the old rate and you'd claim $245 less than you're owed. Price it all at the new rate and you'd claim $210 you can't support. Business tolls and parking go on top of either number, and if you're self-employed you can also deduct the business share of the interest on the truck loan, according to Publication 463. Pub 463 (2025 edition, the current one) is the IRS rulebook for everything below, and when it says "car" it includes pickups and vans.
Which miles count?
The IRS counts the drive from one work location to another: shop to job, job to job, the supply house run, an estimate, the bank deposit. It doesn't count your commute. Pub 463 calls the trip from home to a regular place of business a nondeductible commuting expense, and a truck full of tools doesn't change that: "Hauling tools or instruments in your car while commuting to and from work doesn't make your car expenses deductible."
Two exceptions matter for trades owners. If your home office is your principal place of business, the drive from home to a job is deductible. And if you have a regular shop, the drive from home straight to a temporary job site, one expected to last a year or less, is deductible regardless of distance.
Standard rate or actual expenses?
You choose a method for each vehicle, and the choice comes with strings:
| Standard mileage rate | Actual expenses | |
|---|---|---|
| What you deduct | Business miles × the IRS rate, plus business tolls and parking | The business share of gas, repairs, tires, insurance, registration, and depreciation or lease payments |
| Records | A mileage log | A mileage log plus every receipt |
| Choosing it | For a truck you own, in its first year in the business, and you can switch to actual later. For a leased truck, for the whole lease. | Any year. Once you've taken section 179, bonus or MACRS depreciation on the truck, it stays here. |
| Ruled out when | five or more vehicles are used for business at the same time | Never |
The fleet rule catches growing crews, and Pub 463's own examples come from the trades. A landscaping company whose crews drive four pickups can use the standard rate on all of them, even after trading two in during the year, because no more than four were on the road at once. A housecleaning business with four vans and the owner's car working at the same time can't use it on any of the five. Vehicles you alternate between don't count as used at the same time.
Writing a truck off fast has a price too. If you or your CPA expensed the truck with section 179 or 100% bonus depreciation, the standard rate is gone for that truck. The first year locks it in either way: for a truck you own, you have to choose the standard rate in its first year in the business or lose it for good. Run both numbers before that first return is filed. The year-end checklist covers the truck decision in more detail.
What records does the IRS want?
For each business trip, Pub 463 asks for the date, where you went, the business purpose and the miles. For each truck, it asks for the total miles for the year, what you paid for it and the date you started using it for business. Write it down at or near the time; a log you fill in weekly counts as timely. A number you rebuild in March doesn't: Pub 463 says you "can't deduct amounts that you approximate or estimate."
Route work gets a break. Pub 463's example is a sales rep on an established route, who can record the route's length once, then the date of each trip and the year's total miles. If your pest control or pool techs run the same route every month, ask your CPA whether that fits.
Brandon Vaughn, who coaches home service owners, doesn't take submitted miles on faith, even from his own team. His company trucks run fleet tracking. For anyone driving a personal vehicle:
…my VA goes into Google Maps, drops those addresses into Google Maps and confirms the number and makes sure that it actually matches.
Keep the log with your receipts so both live in one place (here's a setup that works). Side by side with the fuel and repair receipts, it also tells you what each truck costs per mile, which you need when you price jobs. If you want a second set of eyes on which method fits your trucks, bring last year's return and your log to a free profit call.
Reimbursing techs who drive their own trucks
When a tech or salesperson drives a personal vehicle for you, reimburse them under an accountable plan and the money isn't wages. Pub 463 sets three rules: the trips are for your business, the employee accounts for them within a reasonable time, and they return anything you paid beyond what they documented. Turning in the log within 60 days and returning an overpayment within 120 days counts as reasonable.
You can pay any rate you like. An allowance at or below the IRS rate, backed by dates, places and business purpose, counts as proof of the expense. Pay more than the IRS rate and the excess goes in box 1 of their W-2 as wages. Your techs need this from you, because under Pub 463 most employees can't deduct unreimbursed work miles on their own returns. If you own more than 10% of the corporation that reimburses you, Pub 463 says you still have to be able to prove the miles to the IRS yourself.
Reimbursing isn't always the cheap option. An owner who had just paid off his vehicle loans told Brandon he didn't want another truck note to put a salesperson on the road. Brandon suggested reimbursing mileage, which is what his own company did before it could afford a sales vehicle. Then he did the math:
If he's driving 1500 miles a month and at 750 bucks a month that you're paying for that expense, you're paying that in mileage reimbursement to him, it actually can be two to three times more expensive than to go buy a little used Scion…
Brandon was paying 50 cents a mile back then. At the 2026 IRS rates, the same 1,500 miles a month comes to $13,365 for the year: $6,525 through June and $6,840 after. Reimbursing feels cheap because there's no loan, so put the annual number next to the price of a used vehicle before you decide.
Common mileage questions
Can I deduct the drive from home to my first job?
Not if you drive to your own shop first; that leg is commuting. If you have a regular shop and go straight from home to a temporary job site, Pub 463 lets you deduct it. If your home office is your principal place of business, the drive from home to any job counts.
Do I need a separate log for each truck?
Yes. The IRS wants each vehicle's business miles and its total miles for the year, so keep one log per truck, even when one person drives two of them.
Who claims the deduction, me or the company?
If you're a sole proprietor or a single-member LLC taxed as one, it goes on your Schedule C. If the company is a corporation and you drive your own truck, the usual route is for the company to reimburse you under an accountable plan. Ask the pros who handle your tax prep and planning which fits your setup, and see the deductions trades owners miss for the rest of the truck costs.
