Mileage Deduction Calculator 2023
Our calculator uses the IRS standard mileage rates to automatically calculate your mileage deduction.
What is a mileage deduction?
A mileage deduction is a tax deduction you can claim when driving a personal vehicle for work-related or business purposes. On the other hand, it can be a mileage reimbursement when driving for an employer.
You can deduct a certain amount from your taxes for each business mile driven. However, how much you can claim depends on the mileage rates the IRS sets. Therefore, staying up-to-date with the mileage rates is recommended as they can change yearly.
What are the mileage rates?
There are mileage rates for business, charity, medical, or moving purposes. They should all be tracked to help maximize your mileage deduction claim. You also can’t claim a deduction when traveling from home to work, and travel reasons must be “ordinary and necessary”.
1. Business: Driving for work-related purposes
- Going from one workplace to another workplace
- Visiting clients or customers
- Going to business meetings that aren’t at your workplace
- Going from your home to a temporary workplace (must have one or more regular places of work)
2. Charity: Driving to provide services or to an event for a charitable organization
3. Medical: Driving for medical purposes (check with the IRS for accepted medical expenses)
4. Moving: Driving for moving purposes (only available for active-duty military members)
How do I calculate the mileage deduction?
To calculate mileage deduction, multiply the business miles driven traveled by the mileage rate for that year. Since there are different rates, you’ll have to calculate them separately and add them all together.
How do I track mileage?
Since the IRS requires you to keep “adequate records” of your business miles driven, you’ll need to keep a log of the date, business purpose, and the miles per trip. There are multiple expenses to track, which can become tedious and chaotic.
Instead of tracking mileage on paper, you can use a mobile app like Easy Expense! Easy Expense lets you track your car expenses and mileage deduction, so you can claim the maximum deduction.
Using the standard mileage rate (mileage deduction) vs. actual car expenses
The actual car expenses deduction uses the cost of operating the car rather than a mileage rate. As it can get complex, we recommend consulting a tax professional.
Actual car expenses include:
- Lease payments
- Gas and oil
- Insurance and registration fees
- Garage rent
- Repairs and maintenance
Parking fees and tolls can be claimed as a separate deduction using the standard mileage deduction or actual expense deduction. However, parking fees paid to park at your workplace are not deductible.
Which mileage deduction should I use?
If you use the standard mileage deduction, you can’t use the actual car expense deduction (and vice versa). Although calculating the standard mileage deduction is easier, the actual car expense deduction may be higher. Tracking both is recommended to maximize your tax deductions.