Every year, self-employed people leave real money on the table because they didn't track their business driving. The fix is simple once you understand the rules, so let's walk through them.
1. Which miles actually count
The deduction is for business miles, not personal ones. Generally deductible driving includes:
- Driving from one job or client site to another
- Trips to meet clients, give estimates, or do site visits
- Runs to suppliers, the hardware store, the bank, or the post office for your business
- Driving to a temporary work location
What does not count is your regular commute. Driving from home to a fixed, regular place of work is considered personal commuting and isn't deductible.
Rule of thumb: if the trip exists because of your business and it isn't your everyday home-to-office commute, it's probably deductible. When in doubt, log it and let your tax preparer decide.
2. The two ways to calculate it
Standard mileage method (the easy one)
You simply multiply your business miles by the IRS standard rate. For 2025, that rate is 70 cents per mile. So 8,000 business miles works out to a $5,600 deduction, without saving a single gas receipt.
Actual expense method
Instead of a per-mile rate, you add up the real costs of operating your vehicle (gas, insurance, repairs, maintenance, depreciation) and deduct the business-use percentage. It can produce a bigger deduction for expensive vehicles, but it requires far more record-keeping.
| Standard mileage | Actual expenses | |
|---|---|---|
| Effort | Low — just track miles | High — track every cost |
| Best for | Most contractors & freelancers | Pricey vehicles, heavy costs |
| You must track | Business miles per trip | Miles + all vehicle receipts |
Most self-employed drivers come out ahead, and save themselves a lot of hassle, with the standard mileage method. Whichever you choose, you still need a mileage log, because both methods require knowing your business-use percentage.
3. What the IRS actually wants to see
If you're ever asked to back up your deduction, the IRS expects a timely, contemporaneous log, meaning a record kept around the time of the trip, not reconstructed from memory a year later. Each entry should show:
- The date of the trip
- The miles driven
- The destination
- The business purpose
A shoebox of guesses won't survive an audit. A clean, dated log will.
4. The mistakes that cost people money
- Not tracking at all and guessing a round number at tax time (the #1 audit red flag).
- Forgetting small trips, the hardware store run, the bank deposit, the quick client drop-by. They add up fast.
- Reconstructing the log in April from memory instead of recording trips as they happen.
- Mixing personal and business miles without a clear way to separate them.
5. The painless way to do it
The reason people don't track mileage is that doing it by hand is tedious. That's exactly the problem RoadFolio was built to solve: you start a trip and it records the route, distance, and date automatically using GPS, then totals your deduction for you all year. At tax time you export a clean, IRS-ready report and hand it to your preparer.