Business Mileage Calculator
Track business mileage to maximize your tax deduction. Calculate whether standard mileage or actual expenses saves you more money.
How the Business Mileage Calculator works
Log your business miles and vehicle expenses. Compare the standard mileage rate ($0.655 per mile) to tracking actual vehicle costs. See which method gives you the bigger tax deduction.
Mileage deductions can save you thousands in taxes. Most people just guess, but tracking properly and choosing the right method puts more money in your pocket.
How it works
Tutorial
Business mileage deductions can save you thousands in taxes every year, but you need to track miles correctly and choose the best calculation method. This guide shows you both options so you pay less in taxes.
You have two options: use the calculator above to compare methods instantly, or follow this guide to calculate mileage deductions manually.
The Formula
| Method | How to Calculate |
|---|---|
| Standard Mileage | Business Miles × $0.655 per mile |
| Actual Expenses | Total Vehicle Costs × Business Use Percentage |
| Tax Savings | Deduction Amount × Your Tax Rate |
Step-by-Step Example
Let’s calculate deductions for someone who drove 12,000 business miles.
Step 1: Calculate Standard Mileage Deduction
Multiply business miles by the IRS rate:
| Type of Miles | Miles Driven | Rate | Deduction |
|---|---|---|---|
| Business Miles | 12,000 | $0.655 | $7,860 |
| Commute Miles | 3,000 | Not deductible | $0 |
| Personal Miles | 5,000 | Not deductible | $0 |
| Total Deduction | – | – | $7,860 |
Calculation:12,000 × $0.655 =$7,860
Step 2: Calculate Actual Expense Method
Track all vehicle costs and multiply by business use percentage:
| What You Spent On | Yearly Cost |
|---|---|
| Gas | $3,200 |
| Insurance | $1,800 |
| Repairs and Maintenance | $1,500 |
| Registration and Taxes | $400 |
| Depreciation | $4,500 |
| Total Vehicle Costs | $11,400 |
| Business Use (12,000 ÷ 20,000 total miles) | 60% |
| Business Deduction | $6,840 |
Calculation:$11,400 × 0.60 =$6,840
Step 3: Compare Methods and Calculate Tax Savings
Pick the better method and see what you save:
| Method | Deduction | Tax Savings (at 24% tax rate) |
|---|---|---|
| Standard Mileage | $7,860 | $1,886 |
| Actual Expenses | $6,840 | $1,642 |
| Best Choice | Standard | $1,886 |
Final Answer:Standard mileage saves you$1,886in taxes
What This Means
Standard mileage gives you $244 more in tax savings and requires less paperwork – just track your miles. If your vehicle is expensive to operate or you drive mostly for business, actual expenses might be better.
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