If you drive for your business — client visits, job sites, supply runs — the IRS lets you deduct the cost of that driving one of two ways: a flat rate per mile, or a share of your actual vehicle expenses. Most people default to whichever method they used last year without checking whether the other one is now bigger. This calculator runs both methods side by side on your numbers and tells you which one wins, plus roughly how much that deduction is worth at your tax rate.
How it works
The standard mileage method is simple multiplication: your business miles times the IRS's standard mileage rate for the year. For 2026, that rate is 72.5 cents per mile, up 2.5 cents from 70 cents in 2025. It's meant to approximate the average per-mile cost of owning and running a vehicle — gas, maintenance, insurance, depreciation — bundled into one number so you don't have to track every receipt.
The actual expense method works differently. You total up everything you actually spent running the vehicle for the year — fuel, insurance, repairs, registration, depreciation or lease payments — then multiply that total by your business-use percentage, which is business miles divided by total miles driven. If three-quarters of your driving was for business, you deduct three-quarters of your vehicle costs.
The calculator computes both figures and recommends whichever is larger, since the IRS generally lets you pick the more favorable method (with one catch: if you want to use standard mileage on a given vehicle, you typically have to elect it in the first year that vehicle is used for business — you can't run actual expenses in year one, then switch to standard mileage later on the same vehicle). It also estimates the tax value of your deduction by applying your marginal tax rate to the recommended amount, so you can see roughly what it's worth in real dollars, not just as a deduction line.
Worked example
Say you drove 12,000 business miles out of 15,000 total miles this year, your total vehicle costs came to $6,000, and your marginal tax rate is 22%.
- Standard mileage method: 12,000 × $0.725 = $8,700
- Business-use percentage: 12,000 ÷ 15,000 = 80%
- Actual expense method: $6,000 × 80% = $4,800
- Recommended deduction: max($8,700, $4,800) = $8,700
- Estimated tax saved: $8,700 × 22% = $1,914
Here the standard mileage method wins comfortably, which is typical for a vehicle with moderate running costs and a lot of business mileage — the flat 72.5-cent rate adds up faster than 80% of a relatively modest $6,000 in actual costs. Flip those numbers around — a pricier vehicle with high repair or lease costs — and the actual expense method can easily come out ahead instead.
How to interpret your result
The recommended deduction is the headline number: whichever method produces the bigger write-off, already selected for you. The standard mileage method and actual expense method figures underneath let you see how close the race actually was — if they're nearly equal, small changes in your recordkeeping (catching one more repair bill, logging a few more business trips) could tip the result either way next year. The estimated tax saved figure translates the deduction into a rough dollar value by applying your marginal tax rate, so you can gauge whether it's worth the extra effort of tracking actual expenses versus just logging mileage.
This tool is a planning estimate, not a tax return. It does not verify that your mileage log meets IRS substantiation requirements, does not model depreciation recapture when you sell the vehicle, does not account for state-specific rules, and does not check the first-year election restriction described above. If your business-use percentage is unusually high or low, or your vehicle costs include anything unusual (an accident repair, a major lease buyout), talk to a tax professional before committing to a method. This calculator covers US federal tax rules only.
Methodology & sources
standard = businessMiles × MILEAGE_RATE; actual = totalVehicleCosts × (businessMiles ÷ totalMiles), computed only when total miles is greater than zero; recommendedDeduction = max(standard, actual); taxSaved = recommendedDeduction × (marginalRatePercent ÷ 100). All four figures are rounded to the cent from their unrounded intermediate values.
For 2026, this calculator uses the IRS's standard business mileage rate of 72.5 cents per mile, announced in IRS sets 2026 business standard mileage rate at 72.5 cents per mile, up 2.5 cents, effective for miles driven on or after January 1, 2026. See also the IRS's Standard Mileage Rates page for the underlying rules on choosing and switching between methods. This tool covers US federal tax rules only — not state-level rules, not depreciation recapture, and not a substitute for professional tax advice.