Business Mileage Tracking Guide

The standard mileage rate provides a per-mile deduction that includes gas, insurance, depreciation, repairs, and general operating costs. For 2024, the rate is 67 cents per business mile. This method is simple: multiply your total business miles by the rate. You can also deduct parking fees and tolls separately.

The actual expense method deducts the business-use percentage of all vehicle costs: gas, oil, tires, repairs, insurance, registration, depreciation, lease payments, and car washes. If your vehicle is used 60% for business, you deduct 60% of these costs. This method requires more recordkeeping but can yield a larger deduction for expensive vehicles or high-cost markets.

You must choose your method in the first year you use the vehicle for business, and certain restrictions apply when switching. If you use the standard mileage rate in the first year, you can switch to actual expenses later. If you use actual expenses first, you cannot switch to the standard rate for that vehicle. Regardless of which method you choose, a mileage log is required.

Business mileage includes travel between your office (or home office) and client locations, trips to the bank, post office, or office supply store for business purposes, travel to meetings, conferences, and networking events, and any other driving with a primary business purpose.

Commuting from home to a regular workplace does not count as business mileage. However, if your home is your principal place of business (you qualify for the home office deduction), trips from home to any business destination are deductible. This distinction makes the home office deduction doubly valuable for people who drive frequently.

Trips between two business locations are always deductible, even if you do not have a home office. Driving from one client site to another, from your office to a business lunch, or from a meeting to the supply store all qualify as business miles.

The IRS requires a contemporaneous log—a record created at or near the time of each trip. A mileage log must include the date of the trip, the starting and ending location, the business purpose, and the total miles driven. You should also record the odometer reading at the beginning and end of the year.

A smartphone mileage tracking app is the most reliable way to maintain a log. Apps like MileIQ, Everlance, or TripLog use GPS to automatically detect and record trips. You then categorize each trip as business or personal with a swipe. This eliminates manual logging and ensures no trips are forgotten.

If you prefer a manual log, keep a small notebook in your car and record each trip immediately. Monthly summaries are not sufficient—the IRS requires trip-by-trip detail. In an audit, a reconstructed log (created after the fact) carries significantly less weight than a contemporaneous record.

Track every business trip, no matter how short. A five-mile round trip to the post office may seem trivial, but if you make that trip twice a week, it adds up to over 500 miles per year—a $335 deduction. Small trips accumulate into significant deductions.

Combine errands efficiently to maximize the business-use percentage of your driving. If you need to visit a client, stop at the bank, and pick up supplies, plan the route to cover all stops in one trip. The entire mileage for a primarily business trip is deductible.

If you use one vehicle for both business and personal driving, your business-use percentage affects the actual expense method deduction. Maintaining a second vehicle primarily for personal use can increase the business-use percentage of your primary vehicle, resulting in a larger deduction. Run the numbers to see if this strategy makes sense for your situation.