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February 14, 2024 - 2 min read

How to Claim Mileage on Taxes in Five Steps

Claiming a mileage deduction is an important part of reducing taxes for anyone who uses their vehicle for business. Are you wondering how claiming mileage works and if you're eligible? Follow the five simple steps below to claim mileage on your taxes.

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Step 1: Choose your method of calculation

You can claim mileage either by the standard mileage rate method or the actual expenses method.

Standard mileage rate method

The standard mileage rate method allows you to keep track of your business miles and use the standard mileage rate given by the IRS to calculate your mileage claim. The 2024 IRS mileage rate is 67 cents per business mile. If you're claiming mileage for 2023, use the 65.5 cents per mile rate applicable to that year.

Actual expenses method

The actual expenses method lets you claim the expenses you’ve had throughout the year related to your business miles. If you use this method, you will track all your car-related expenses and your mileage.

Find out more about the two methods for claiming mileage on your taxes.

There are a few caveats you should be aware of when picking a method to use for your mileage claim:

  • If in the first year you used your car for business-related driving you claimed mileage with the actual expenses method, you can only use this method for that same vehicle in the following years.
  • If in the first year you used your car for business driving you claimed mileage with the standard mileage rate method, in the following years, you can use either method to claim your business miles at tax time.
  • If you lease a car, you lock yourself into the first method you use for the duration of the lease, including renewals. This goes for both the standard mileage rate and the actual expenses method.

If you are eligible to use both methods and have kept records of both your mileage and car expenses, calculate your mileage claim using both methods and select whichever gives you the highest deduction.

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Step 2: Gather your mileage records

The necessary documents will depend on which method you use. If you use the standard mileage deduction method, you will need your mileage logbook. If you are claiming your actual expenses, you will need both your mileage logbook and all receipts for your car expenses throughout the year.

Step 3: Calculate your mileage claim

Standard mileage rate method

Now it's time to work out how much mileage to claim on taxes. If you are using the standard mileage deduction, multiply the total business miles you recorded for the year by the standard mileage rate for the applicable year. Try the mileage calculator below to see how much you can deduct for the 2023 tax year.

Actual expenses method

If you use the actual expenses method, add up all of your vehicle-related expenses for the year and multiply this figure by the percentage of your car used for business.

Step 4: Fill out the correct tax form

For qualified employees

If you are an Armed Forces reservist, qualified performing artist, fee-basis state or local government official, or an employee with impairment-related work expenses, use Form 2106 to claim mileage on taxes.

For self-employed and business owners

If you are self-employed, a contractor, or a business owner, use Schedule C, Part ll, Line 9. You will also need to complete Part lV, in which you will give the following information on your vehicle:

  • The year you placed your vehicle into use for business purposes
  • The total number of miles you drove your vehicle and the miles you drove for business, commuting, and other purposes
  • If your vehicle was available for use during off-duty hours
  • If you or your spouse have another vehicle available for personal use
  • Evidence to support your deduction - this would be a mileage logbook and receipts with your car expenses if using the actual expenses method.

You can fill out Schedule C in paper form or online by using IRS e-file or a professional tax service.

Step 5: Retain your records

You should keep your mileage claim records for at least three years from the date you file your tax claim or at least two years from the date you paid the tax, whichever is later. This is the period within which the IRS can initiate an audit.

Eligibility for claiming mileage on taxes

Most employees are not eligible to claim mileage until January 2026 according to the Tax Cuts and Jobs Act, even if employers don't reimburse their business mileage expenses.

Those eligible to claim mileage on their taxes are:

  • Self-employed individuals, contractors, and business owners
  • Armed Forces reservists
  • Qualified performing artists
  • Fee-basis state or local government officials
  • Employees with impairment-related work expenses

FAQ

You can keep a mileage logbook or use an app for this purpose. Be sure to record your odometer reading at the beginning and end of the period for which you are recording mileage, and note down the date, destination, distance, and purpose for each trip you've driven throughout the year.
Choosing between claiming mileage at the IRS mileage rate or claiming gas and other car expenses will depend on your situation – if you claimed mileage by the standard mileage rate in the first year you used your car for business, you can choose either method in the following years. We recommend working out your mileage claim using both methods to see which will bring you a higher mileage deduction to maximize your tax savings.

How to automate your mileage logbook

Manually filling out your logbook can get tedious - see how to automatically track trips for your mileage reimbursement or deductions.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for, legal, tax or accounting advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal, tax or accounting advisor.