Quick answer: if you drive your own car for a side hustle, you can usually deduct business miles on Schedule C. For 2026 the IRS standard mileage rate is 72.5 cents per mile for business driving from January 1 through June 30 and 76 cents per mile from July 1 through December 31, after a mid-year increase. Regular commuting does not count, but trips to clients, suppliers, the post office or between your day job and a side hustle location usually do. Keep a log with the date, destination, purpose and miles of each trip, and add parking fees and tolls separately.
Driving is one of the most common side hustle costs and one of the easiest to overlook. Delivery drivers and rideshare drivers know their miles add up, but so do photographers driving to sessions, resellers visiting thrift stores, pet sitters crossing town and tutors meeting students at the library.
This guide explains how the mileage deduction works for self-employed people, how to choose between the standard rate and actual expenses and how to keep records that hold up if the IRS asks. It is part of our wider guide to starting and running a side hustle.
Sources: IRS standard mileage rates page and IR-2025-128 (2026 rate of 72.5 cents per mile); IRS Notice 2026-11 and IR-2026-29 (76 cents per mile for business miles from July 1, 2026); IRS Notice 2026-10 (2026 depreciation component of 35 cents per mile); IRS Publication 463, Travel, Gift, and Car Expenses; IRS Publication 334, Tax Guide for Small Business; Instructions for Schedule C (Form 1040). Checked October 2026. General information, not tax advice; check your situation with a tax professional.
Who Can Claim the Mileage Deduction
The deduction is for business use of a vehicle by people who are self-employed. If you report side hustle income on Schedule C as a sole proprietor or single-member LLC, you can generally deduct the business portion of your driving.
Employees are in a different position. Since 2018, unreimbursed employee travel expenses have not been deductible for most workers, and the One Big Beautiful Bill Act made that rule permanent. So the miles you drive for your W-2 job are usually not deductible, while miles you drive for your own side business can be.
The vehicle can be a car, van, pickup or panel truck. The IRS says the standard rates apply to electric and hybrid cars as well as gasoline and diesel vehicles.
The 2026 Mileage Rates
Normally the IRS sets one business rate for the year. In 2026 it changed mid-year.
| Period | Business rate |
|---|---|
| January 1 to June 30, 2026 | 72.5 cents per mile |
| July 1 to December 31, 2026 | 76 cents per mile |
| 2025 (for comparison) | 70 cents per mile |
Because of the split, your log needs dates. Miles driven before July 1 use the lower rate, and miles driven on or after July 1 use the higher rate.
Here is a simple example. Suppose a mobile dog groomer drove 1,200 business miles from January through June and 1,500 business miles from July through December.
- 1,200 miles x $0.725 = $870
- 1,500 miles x $0.76 = $1,140
- Total standard mileage deduction = $2,010
Parking fees and tolls for business trips are deductible on top of that amount. Fines, such as parking tickets, are not.
Which Trips Count as Business Miles
IRS Publication 463 draws a sharp line between commuting and business travel. Commuting, meaning travel between your home and your regular place of work, is a personal expense and is not deductible, no matter how far it is.
Trips That Usually Count
- Driving to meet a client or customer.
- Picking up supplies, inventory or equipment for the business.
- Taking packages to the post office or a shipping store.
- Driving to the bank to deposit business income.
- Traveling to a temporary work location, such as an event you are working.
- Going directly from your day job to a side hustle location on the same day.
That last point surprises many people. Publication 463 says the cost of getting from one workplace to another is generally deductible. If you leave your office job and drive straight to a client’s house for an evening photo session, those miles can count.
When Your Home Is Your Office
If your home is your principal place of business for the side hustle, trips from home to other business locations are generally business travel rather than commuting. A home office that qualifies under the IRS rules strengthens this position. Without one, the first and last trips of the day may look more like commuting.
Trips That Do Not Count
- Driving to and from your regular job.
- Personal errands, even if you take a work call on the way.
- The personal part of a mixed trip. If you stop at a client’s home on the way to a family dinner, only the extra miles for the business stop count.
Standard Mileage Rate vs Actual Expenses
You have two ways to calculate the deduction for a car you own.
The Standard Mileage Rate
You multiply business miles by the IRS rate. The rate is meant to cover gas, oil, repairs, tires, insurance, registration and depreciation. Most side hustlers use this method because it is simple and needs only a mileage log, parking receipts and toll records.
The Actual Expense Method
You add up the real costs of operating the car for the year, then deduct the business percentage. Those costs include gas, oil changes, repairs, tires, insurance, registration fees, lease payments or depreciation and garage rent. If 30 percent of your total miles were for business, you deduct 30 percent of those costs.
This method takes more record keeping, since you need receipts for every expense plus a log of total and business miles. It can produce a larger deduction for expensive vehicles, cars with high insurance costs or drivers with relatively few total miles.
Rules for Choosing and Switching
The IRS has timing rules that are easy to miss.
- To use the standard mileage rate for a car you own, you must choose it in the first year the car is used for business.
- After that first year, you can switch between the standard rate and actual expenses in later years.
- If you start with actual expenses and use accelerated depreciation, you generally cannot switch that car to the standard rate later.
- For leased cars, if you choose the standard rate, you must use it for the entire lease period.
- You cannot use the standard rate if you operate five or more vehicles at the same time, such as in a fleet.
Many people start with the standard rate in year one to keep their options open.
Depreciation Inside the Standard Rate
Part of each standard-rate mile is treated as depreciation. For 2026, IRS Notice 2026-10 sets that portion at 35 cents per mile. You do not deduct it separately, but it reduces your car’s tax basis, which matters if you later sell the car or switch methods. A tax professional can help with that math.
Using More Than One Car
If your household has two cars and you use both for the side hustle at different times, keep a separate log for each vehicle. Each car has its own method choice, its own total miles and its own business percentage. Mixing them in one log makes it hard to show which car made which trip, and Part IV of Schedule C asks for details about each vehicle you claim.
How to Keep a Mileage Log the IRS Accepts
Publication 463 asks for records made at or near the time of each trip. Reconstructing a year of driving from memory in March is the weakest kind of record.
What Each Entry Should Show
- Date of the trip.
- Starting point and destination.
- Business purpose, such as “client session, Smith family” or “inventory pickup.”
- Miles driven, from odometer readings or a mapping estimate.
Record your odometer reading on January 1 and December 31 as well. Those numbers show your total miles for the year, which you need for Schedule C.
Tools That Make Logging Easier
A paper notebook in the glove box works fine. A spreadsheet is easy to total at tax time. Mileage tracking apps use your phone’s GPS to record drives automatically, and you then mark each one as business or personal.
Whichever tool you use, review it weekly. Five minutes on Sunday fixes forgotten trips while you still remember them. If you already track income and expenses in one place, add mileage to that routine. Our guide on tracking side hustle income and expenses walks through a simple system.
Gig Apps and Mileage
Delivery and rideshare apps often show miles driven while you were online or on a trip. Those summaries are useful, but they may not include every business mile, such as driving to your first pickup area. Keep your own log alongside the app data so you can support the full number.
Where Mileage Goes on Your Tax Return
Car and truck expenses go on line 9 of Schedule C. If you claim car expenses and are not required to file Form 4562, you complete Part IV of Schedule C, which asks for the date the vehicle was placed in service, business miles, commuting miles and other personal miles. It also asks whether you have written evidence to support your deduction.
Our line-by-line Schedule C walkthrough shows where vehicle expenses sit among your other costs.
Remember that the deduction lowers your net profit, which lowers both income tax and self-employment tax. If you make quarterly payments, include an estimate of your mileage deduction when you plan them. See our guide to quarterly estimated taxes for the payment schedule.
Common Mileage Mistakes
Claiming Commuting Miles
Driving to your regular job is never a business trip, even if you take calls in the car.
Rounding Every Trip Up
Round numbers on every entry look estimated. Real logs have odd numbers like 7.3 or 18.
Claiming 100 Percent Business Use
Very few people use a personal car only for business. A claim of 100 percent business use for your only car invites questions.
Forgetting Parking and Tolls
These are easy to miss and add up for city-based side hustles. Keep receipts or save the transaction record from your toll account.
Using One Rate for the Whole Year
For 2026, applying 76 cents to January miles overstates the deduction, and applying 72.5 cents to fall miles leaves money on the table. Split your log at July 1.
How Mileage Fits Into Your Other Deductions
Mileage is one of many expenses a side hustle can deduct. Supplies, software, a share of your phone bill, fees and a qualifying home office can all reduce your taxable profit. Our list of side hustle tax deductions covers the most common ones and the records to keep for each.
Remember that deductions only help if the expense is ordinary and necessary for the business. Driving across the state for a sale you could have shipped may be hard to justify.
Frequently Asked Questions
What is the 2026 mileage rate for side hustles?
The IRS business rate is 72.5 cents per mile for miles driven January 1 through June 30, 2026, and 76 cents per mile for miles driven July 1 through December 31, 2026.
Can I deduct miles driven to my day job?
No. Driving between home and your regular job is commuting, which is a personal expense. Driving from your day job directly to a side hustle client on the same day is generally deductible.
Do I need a mileage log if I use the standard rate?
Yes. The standard rate replaces receipts for gas and repairs, but you still need a record of the date, destination, purpose and miles for each business trip.
Can I switch from the standard mileage rate to actual expenses?
If you chose the standard rate in the first year you used the car for business, you can generally switch to actual expenses in a later year. Switching the other way has more restrictions.
Are parking and tolls included in the standard mileage rate?
No. Business parking fees and tolls are deductible in addition to the standard rate. Parking tickets and other fines are not deductible.