Business use of your vehicle, commuting and the mileage log
Your deduction is built on one number: the share of miles you drive for business. Here is what counts, what does not, and the records that make the number believable.
Prepared by Prem Tax and Accounting Corp. Last checked against official sources on October 20, 2026.
What counts as business use
- Driving to clients, customers, job sites, suppliers, the bank and the post office for the business.
- Driving from a home office that is your principal place of business to another work location in the same business.
- Driving to a temporary work location in the same trade or business, generally one where the work is expected to last a year or less.
- Delivering goods and hauling tools or supplies for the business.
- Business-related parking and tolls at a client or job site.
What does not count
- Commuting: driving between your home and your regular place of work. It is never deductible, however far it is, and even if you make business calls on the way.
- Parking at your own place of business: that is part of commuting.
- Putting your business name on the vehicle. Advertising does not change personal use into business use.
- Hauling tools in the vehicle while you commute. It does not make the commute deductible.
- Personal errands, vacations and family use.
Your business-use percentage
Divide your business miles for the year by your total miles for the year. For example, 12,600 business miles out of 18,000 total miles is 70% business use. You then deduct 70% of the vehicle costs, or use the mileage rate on the 12,600 business miles.
The 50% line
- More than 50% business use is needed for bonus depreciation, Section 179 and accelerated depreciation on a car, and you must meet it every year of the six-year recovery period.
- At 50% or less you must use straight-line depreciation over five years, with no bonus depreciation or Section 179.
- If your business use drops to 50% or less in a later year, you switch to straight line and must include "excess depreciation" in your income for that year (reported on Form 4797).
The mileage log
The IRS requires you to prove your business use. A written record kept close to the time of each trip is the best evidence: a notebook, a spreadsheet or a phone app. For each business trip keep:
- The date of the trip.
- The miles: start and end odometer readings, or the trip distance.
- The destination.
- The business purpose.
- Plus, for the year: the total miles the vehicle was driven and the date you started using it for business.
You cannot deduct amounts you approximate or estimate. If you cannot keep a log all year, the IRS allows a record for part of the year, if you can show that the period is representative. Pub. 463 gives the example of a log kept during the first week of each month, backed by invoices showing the same pattern later in the month.
Who owns the vehicle matters
| Your situation | What generally applies |
|---|---|
| Sole proprietor or single-member LLC | You deduct vehicle costs on Schedule C: the mileage rate or actual costs. |
| S or C corporation owner who is also an employee, driving their own car | Unreimbursed employee driving costs are generally not deductible on the personal return (the 2% itemized deduction was made permanently unavailable in 2025). A common solution is for the business to reimburse you under an accountable plan. |
| The business owns or leases the vehicle | The business deducts the actual costs and depreciation. Personal use by an owner or employee is a taxable benefit: its value is included in wages, or the person pays it back. |
| Employee driving their own car for the employer | Unreimbursed costs are generally not deductible on the federal return. Ask about an accountable plan. There are a few exceptions, for example for certain educators, Armed Forces reservists and some performing artists. |
Common questions
Is the drive to my first client of the day deductible?
It depends where your workday starts. If you have a home office that qualifies as your principal place of business, the trip from home to a client is business travel. If you have a regular office or shop, driving from home to it is commuting, but driving from there to a client is business travel. A temporary work location in the same trade or business (generally a job expected to last a year or less) can also be deductible. If your pattern is mixed, ask us.
Do I need a log if I use the standard mileage rate?
Yes. The rate gives a cents-per-mile figure, but you still have to prove how many business miles you drove, with dates, places and purposes. Without records the deduction can be disallowed.
Can an app replace a notebook?
Yes. A record kept on a computer, phone or app counts as an adequate record if it has the required details for each trip. Check its reports and keep a backup.
I did not keep a log in earlier years. What now?
Estimates are not allowed. If records were lost for reasons beyond your control, such as a fire or flood, you can reconstruct them. If you simply did not keep a log, the deduction may be at risk. Start a log now and talk to us about earlier years.
My business name is on the vehicle. Is all the use business use?
No. Advertising on a vehicle does not turn personal use into business use.
Official sources
- IRS Publication 463: Travel, gift, and car expenses
- IRS: Instructions for Form 4562
- IRS Notice 2026-10: 2026 standard mileage rates
- IRS Publication 15-B (2026): Employer's tax guide to fringe benefits
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