Short answer: For 12,000 business miles out of 18,000, standard mileage deducts $8,910 and actual expenses deduct $6,121: standard mileage deducts $2,789 more, saving about $697 in tax. Standard mileage usually wins for drivers with lots of miles in an affordable car. Full rules: Standard Mileage vs. Actual Expenses: Which Car Deduction Is Better for Drivers?.
Check our math
Here is the result above, step by step, using the numbers already filled in.
- Business share of driving12,000 ÷ 18,000 = 67%
- Gas for all driving18,000 mi ÷ 28 mpg × $4.25 = $2,732
- All car costs for the year$2,732 + $1,200 + $250 + $1,800 + $200 + $3,000 = $9,182
- Actual expenses deduction$9,182 × 67% = $6,121
- Standard mileage deduction6,000 × 72.5¢ + 6,000 × 76¢ = $8,910
- Difference$8,910 − $6,121 = $2,789
- Tax difference at 25%$2,789 × 25% = $697 in tax
How this calculator works
There are two ways to deduct a car you use for business. Standard mileage is the IRS rate times your business miles: 72.5¢ a mile through June 30, 2026 and 76¢ from July 1. Actual expenses is the business share of everything the car costs: gas, repairs, tires, insurance, registration and depreciation or lease payments, times the percentage of your miles that were for business (IRS Topic 510: Business use of car).
Under either method you can add business parking and tolls. Standard mileage needs a mileage log; actual expenses need the log and a receipt for every cost.
The calculator adds up both and shows which is bigger and what the difference is worth at your tax rate. Depreciation is the hardest number; enter a rough figure and confirm it with a tax pro before you choose, because the choice can lock you in.
Rules that lock in your choice
- For a car you own, you generally have to use standard mileage in the first year the car is used for business if you want the option to use it later. After that you can switch between methods in later years.
- If you start with actual expenses and take depreciation, you usually can't switch to standard mileage for that car.
- For a leased car, if you choose standard mileage you use it for the whole lease.
Details are in IRS Publication 463.
Which method wins as business miles grow
| Business miles | Total miles | Standard mileage | Actual expenses | Bigger deduction |
|---|---|---|---|---|
| 6,000 | 12,000 | $4,455 | $4,136 | Standard mileage |
| 9,000 | 15,000 | $6,682 | $5,236 | Standard mileage |
| 12,000 | 18,000 | $8,910 | $6,121 | Standard mileage |
| 15,000 | 21,000 | $11,137 | $6,884 | Standard mileage |
| 20,000 | 26,000 | $14,850 | $7,997 | Standard mileage |
| 25,000 | 31,000 | $18,563 | $8,996 | Standard mileage |
Same car as the starting numbers (28 mpg, $6,450 a year of non-gas costs), plus 6,000 personal miles. Half the business miles before July 1.
Worked examples
Expensive new truck, fewer miles
8,000 business miles of 14,000 total, 17 mpg, $9,000 of depreciation, $2,400 of insurance and higher repair and registration costs.
| Result | |
|---|---|
| Bigger deduction | Actual expenses |
| Standard mileage | $5,940 |
| Actual expenses | $9,857 |
Hybrid, lots of miles
30,000 business miles of 36,000 total, 48 mpg, $2,000 of depreciation and modest running costs.
| Result | |
|---|---|
| Bigger deduction | Standard mileage |
| Standard mileage | $22,275 |
| Actual expenses | $6,973 |
Using your result
If this is your car's first year of business use and standard mileage wins or it's close, standard mileage keeps both options open for later years. If actual expenses win by a lot, as with an expensive car driven fewer miles, talk to a tax pro about depreciation before you file.
Keep the records for both methods for the first year: a mileage log and receipts. Then you can compare with real numbers instead of estimates.
What it doesn't cover
- Depreciation is simplified to one yearly number. Real depreciation follows IRS schedules and limits.
- Car loan interest isn't included; see Car Loan Interest Deduction: What It Means for Gig Drivers.
- It doesn't track switching rules across years for you.
- Not tax advice: the method you pick has long-term effects, so confirm with a tax professional.
Read more
- Standard Mileage vs. Actual Expenses: Which Car Deduction Is Better for Drivers?
- Car Loan Interest Deduction: What It Means for Gig Drivers
Frequently asked questions
Is standard mileage or actual expenses better for gig drivers?
Standard mileage usually wins when you drive a lot of business miles in an affordable, fuel-efficient car. Actual expenses can win for expensive cars, high running costs or fewer miles. The calculator shows which is bigger for your numbers.
Can I switch from actual expenses to standard mileage?
Usually not for the same car once you've taken depreciation under actual expenses. Using standard mileage in the first year keeps both options open.
Can I deduct gas with the standard mileage rate?
No. Gas, repairs, insurance and depreciation are built into the rate. Parking and tolls for business are deductible under either method.
At what mileage does standard mileage win?
For the starting car here, standard mileage is bigger at every mileage in the table above. For an expensive car, actual expenses can win until business miles are much higher; enter your own costs to see where yours crosses over.
Does a leased car change the choice?
Yes. With a lease, actual expenses use the business share of your lease payments, and if you pick standard mileage you have to keep using it for the whole lease.
What records do I need for actual expenses?
A mileage log showing business and total miles, plus receipts or statements for every car cost you deduct.
Sources
- IRS Topic 510: Business use of car
- IRS Publication 463: Travel, gift and car expenses
- IRS: 2026 business standard mileage rate (January announcement)
- IRS Announcement 2026-11 (Internal Revenue Bulletin 2026-29): 76¢ from July 1, 2026
Reviewed against IRS sources: October 2026 · Updated October 2026 · By the NetTakeHome team. Estimates for planning, not tax, legal or financial advice. NetTakeHome is not affiliated with DoorDash, Uber, Lyft or Instacart.