# IRS Mileage Deduction Basics

This article covers the basics of how the IRS mileage deduction works. SmartMiles is not a tax advisor — consult a tax professional for advice specific to your situation.

## What is the mileage deduction?

If you use your personal vehicle for business, medical, charity, or certain moving purposes, the IRS lets you deduct a set amount per mile driven. This is called the standard mileage deduction.

You claim it when you file your taxes. It reduces your taxable income.

## Who qualifies?

- **Self-employed individuals** — If you drive for your business (freelancer, contractor, rideshare driver, delivery driver, realtor, etc.), you can deduct business miles.
- **Employees** — Most W-2 employees cannot deduct mileage on their federal taxes (this changed with the Tax Cuts and Jobs Act of 2017). However, your employer may reimburse you.
- **Anyone** — Medical, charity, and moving miles are available regardless of employment type, though eligibility rules vary.

## What counts as a deductible business trip?

- Driving from one work location to another.
- Driving to meet a client or customer.
- Driving to the bank, post office, or store for business supplies.
- Driving for rideshare or delivery work (the miles while you are available and looking for rides count too, depending on your situation).

## What does NOT count?

- **Commuting** — Driving from your home to your regular office and back. The IRS considers this personal.
- **Personal errands** combined with business trips — Only the business portion qualifies.

**Exception:** If you have a home office that qualifies as your principal place of business, trips from home to other work locations may be deductible. Talk to a tax professional about this.

## Standard mileage rate vs. actual expenses

The IRS gives you two ways to deduct vehicle expenses:

1. **Standard mileage rate** — Multiply your deductible miles by the IRS rate. Simple, no receipt tracking needed. This is what SmartMiles calculates.
2. **Actual expenses** — Track all vehicle costs (gas, insurance, repairs, depreciation) and deduct the business-use percentage. More complex but sometimes yields a larger deduction.

You generally choose one method for each vehicle and stick with it. Most people choose the standard mileage rate for simplicity.

## Record-keeping requirements

The IRS requires a contemporaneous record of each business trip, including:

- Date of the trip
- Starting and ending locations
- Business purpose
- Miles driven

SmartMiles creates this record automatically. By classifying your trips and adding notes, you are building an IRS-compliant mileage log.

## How to claim the deduction

- **Self-employed:** Report business mileage on Schedule C (Form 1040).
- **Medical:** Report on Schedule A (itemized deductions), subject to the 7.5% AGI threshold.
- **Charity:** Report on Schedule A (itemized deductions).

## Disclaimer

This article is for general informational purposes only. Tax laws change and individual circumstances vary. Always consult a qualified tax professional for advice about your specific situation.