Mileage or actual vehicle expenses

Two things about 2026 that most advice has not caught up with, and one of them changes how you have to keep records.

The rate changed in the middle of the year

The IRS set two standard mileage rates for 2026. irs.gov

Mid-year changes are unusual — the IRS normally sets one rate per year and only splits it when fuel prices move sharply.

The consequence is a record-keeping one. A year’s total mileage multiplied by a single rate is wrong regardless of which figure you use. Trips have to be logged with dates, and the two halves totalled separately.

The gap is small on 6,000 miles and grows linearly. It also runs in both directions, which means the error is not conservative — using the higher rate for the whole year overstates the deduction.

The choice that is harder to reverse than people expect

There are two methods, and picking one in the vehicle’s first year of business use constrains what you can do afterwards.

Standard mileage. A flat rate per business mile, covering fuel, maintenance, insurance and depreciation together. Simple, and it needs only a log.

Actual expenses. The business-use share of everything the vehicle actually costs, including depreciation. More paperwork and usually a larger deduction for an expensive vehicle.

The rule that catches people: if you use actual expenses in the first year, you generally cannot switch to the standard rate for that vehicle later. Starting with the standard rate leaves both doors open.

For a freelancer who is unsure, the standard rate in year one is the option that preserves the choice.

Which is usually larger

Actual expenses tend to win for an expensive vehicle, a new one still depreciating fast, or one with high running costs. The standard rate tends to win for an older, cheap, reliable car driven a lot.

Neither is a rule. The only way to know is to keep both sets of records for a year and compare — which is what a preparer will suggest, and which is more work than most people will do.

What counts as a business mile

Not commuting. Travel between home and a regular workplace is personal, however far it is. What is not deductible covers the distinction, and it is the most-claimed non-deduction there is.

What counts: client to client, a qualifying home office to a client, travel to a temporary work location, and trips for supplies or business banking.

The log

Whichever method, the log is the deduction. Without dates, mileage and purpose, the claim is unsupported — and in 2026 the dates matter more than usual because of the two rates.

An app that records automatically is worth its cost. Reconstructing a year of driving from memory in April is both painful and, in an audit, unconvincing.

Related: deductions for freelancers · what is not deductible · home office · the calculator