If you drive for business and you're not tracking every mile, you're donating money to the IRS. The standard mileage rate for 2024 is 67 cents per mile. A contractor who drives 5,000 business miles per year but doesn't track them loses $3,350 in deductions — roughly $800–$1,000 in actual taxes depending on their bracket.
Most contractors vastly underestimate how many business miles they drive. And then they don't track them because they assume it's not worth the hassle.
It is.
What Counts as a Business Mile
The IRS is clear about this: commuting doesn't count. Driving from your home to a regular place of business is personal, not deductible, full stop. This is true even if you work from home most of the time and only go to a client's office occasionally.
What does count:
- Client visits — Driving to a client's office, job site, or meeting location
- Bank runs for business — Depositing business checks, picking up a cashier's check for a business expense
- Supply runs — Picking up equipment, materials, or supplies for a specific job
- Business-related errands — Post office trips to mail contracts or invoices, picking up business-specific items
- Trips between work locations — If you have multiple clients in different locations and drive between them on the same day
The common thread: the trip has to have a specific business purpose, and that purpose has to be something other than getting to your regular office.
A practical example: if you work from home and drive to a client's office for a meeting, that's deductible. If you stop at the hardware store on the way back to pick up something for a client's project, that stretch is deductible too. If you then drive home, that final leg is also deductible (home-to-client travel is a gray area, but most tax professionals treat it as deductible when your home is your principal place of business).
Standard Rate vs. Actual Expenses
You have two options for calculating the deduction.
Standard mileage rate (67¢/mile in 2024): Multiply your total business miles by the rate. Simple. No depreciation calculations, no separating out personal vs. business fuel costs. The IRS adjusts this rate periodically to reflect fuel costs and vehicle depreciation.
Actual expense method: Track your total vehicle expenses for the year — fuel, insurance, registration, repairs, lease payments or depreciation — and apply the percentage of miles that were business-related. If you drove 20,000 total miles and 6,000 were business miles, you deduct 30% of your total vehicle expenses.
The actual method wins when you have a high-cost vehicle (expensive lease or luxury car payments) or when you drive a lot of business miles relative to total miles. The standard rate is simpler and covers most contractors adequately.
One catch: if you use the actual expense method in the first year you use a vehicle for business, you're locked into it for that vehicle's life. If you start with the standard rate, you can switch later. Most people start with the standard rate.
The IRS Documentation Requirements
Claiming this deduction requires a mileage log. The IRS doesn't accept "I drove a lot." Your log needs to capture, for each trip:
- Date of the trip
- Destination (not just "client meeting" — the actual address or business name)
- Business purpose (what you did there)
- Miles driven (odometer readings are best; estimates are risky)
You don't need to log personal trips, but you do need to be able to prove what percentage of your total driving was business. Recording your odometer at the start and end of each year helps establish total mileage.
The Easiest Way to Track
The best mileage log is one you actually use. Your options:
App-based tracking (recommended): Apps like MileIQ, Everlance, or Stride auto-detect trips using your phone's GPS and let you swipe to classify them as business or personal. The trip log is exportable as a spreadsheet for your records. Takes about 5 seconds per trip.
Manual spreadsheet: Works fine if you're disciplined about it. A Google Sheet with the four required fields (date, destination, purpose, miles) is IRS-compliant.
Paper log in the glovebox: Old-school but legal. Some people still prefer it.
The most common failure: you mean to log trips and don't. Pick a system before tax season, not during it.
The Dollar Impact
At 67¢/mile, the math is fast:
- 1,000 business miles = $670 deduction
- 3,000 business miles = $2,010 deduction
- 5,000 business miles = $3,350 deduction
A $3,350 deduction at a 22% federal rate plus 15.3% SE tax saves you roughly $1,250 in taxes. For driving you were going to do anyway.
Most contractors who start tracking mileage are surprised by how fast it adds up — a few client visits per month, regular supply runs, trade association meetings. It's rarely zero.
You're driving to client meetings, you're buying supplies, you've got deductions stacking up. Run your actual quarterly estimate in the 1099 Quarterly Tax Planner to see how these deductions affect what you owe this quarter.