You may be able to use the standard mileage rate to deduct vehicle expenses if you're filing:
- Schedule C (Profit or Loss From Business)
- Schedule E (Supplemental Income and Loss)
- Schedule F (Profit or Loss From Farming)
To use the standard mileage rate, you must choose this method in the first year your vehicle is available for business use.
After that first year:
- If you started with the standard mileage rate, you can generally choose either the standard mileage rate (if you still qualify) or actual expenses in later years.
- If you used the actual expense method in the first year the vehicle was placed in service, you generally must continue using actual expenses for that vehicle.
Who Qualifies for the Standard Mileage Rate?
To use the standard mileage rate, you must meet all of the following requirements:
- You own or lease the vehicle.
- You don't operate five or more vehicles at the same time (a fleet operation).
- You haven't claimed depreciation using a method other than straight-line depreciation.
- You haven't claimed a Section 179 deduction for the vehicle.
- You haven't claimed bonus depreciation for the vehicle.
- If the vehicle is leased, you haven't claimed actual expenses for that leased vehicle after 1997.
- You're not a rural mail carrier who received a qualified reimbursement.
What Happens If I Switch to Actual Expenses Later?
If you used the standard mileage rate in the first year of business use and later switch to the actual expense method, special depreciation rules apply.
You can't use the Modified Accelerated Cost Recovery System (MACRS) to depreciate the vehicle. Instead, you must use the straight-line depreciation method over the vehicle's remaining useful life.
You'll also need to reduce your vehicle's basis (but not below zero) by the depreciation portion included in the standard mileage rate for every mile you previously claimed.
Can W-2 Employees Deduct Mileage?
Most W-2 employees can't deduct unreimbursed mileage expenses on their federal tax return.
However, you may still qualify if you're one of the following:
- A qualified performing artist
- A fee-basis state or local government official
- A member of the Armed Forces Reserves traveling for reserve duties
- An employee with impairment-related work expenses
If you're self-employed, a farmer, or reporting certain rental activities, you may still be able to claim vehicle expenses using the standard mileage rate if you meet the eligibility requirements above.
Keep Good Mileage Records
No matter which method you use, keep accurate mileage records throughout the year. A mileage log that tracks the date, destination, business purpose, and miles driven can help support your deduction if the IRS asks for documentation.