8 Easy Steps to Track Your Mileage for Tax Deductions

If driving is part of how you do business—meeting clients, making deliveries, running errands—those miles could be working in your favor come tax season.

The IRS allows deductions for qualified vehicle use, and tracking your mileage properly can lead to big savings on your return. Whether you're using the standard mileage rate or actual vehicle expenses, here’s how to make sure you get credit for every eligible mile.

1. Make Sure You Qualify

You can deduct business mileage if you’re:

• Driving to and from client meetings or job sites

• Traveling between business locations

• Running business errands (like going to the bank or office supply store)

You can’t deduct commuting from home to your regular office—but if you work from home and drive to a client, that trip is deductible.

Other categories the IRS allows deductions for:

• Medical travel

• Charitable service

• Military relocation (active duty only)

2. Choose Your Tracking Method

You have two options:

• Standard mileage rate – track your business miles and multiply by the IRS rate (70 cents/mile for 2025 adjusted each year for inflation).

• Actual expense method – keep receipts for gas, insurance, maintenance, etc. (you still need to track your miles)

Most small business owners find the standard mileage rate easier to manage, but the best choice depends on your driving and expenses.

3. Log Your Odometer at the Start of the Year

Start the tax year with a quick snapshot: record your odometer reading on January 1 (or the day your business use begins). You’ll need this to calculate the total miles driven.

Use a notebook, spreadsheet, or tracking app like MileIQ or Everlance to make this easier.

4. Maintain a Driving Log

For the standard mileage method, the IRS requires detailed records:

• Date of the trip

• Starting and ending locations

• Business purpose

• Beginning and ending odometer readings

5. Keep Receipts if You Use Actual Expenses

If you’re opting to deduct your actual costs, be prepared to save receipts for:

• Gas and oil

• Maintenance and repairs

• Insurance

• Lease payments

• Parking and tolls

Pro tip: store digital copies so nothing gets lost.

Don't forget interest on your car loan is deductible as well and can be deducted even if you choose the standard mileage rate for the portion that is used for business!

6. Record Your Odometer at Year-End

At the end of the year, jot down your odometer reading again. This helps you calculate your total miles and the percentage used for business.

7. Report It on Your Tax Return

When it’s tax time, mileage details go on business tax forms (like Schedule C for sole proprietors). Your CPA or tax pro can help ensure it’s done correctly.

8. Keep Records for 3 Years

The IRS recommends keeping your logs, receipts, and any related documentation for at least three years in case of an audit.

Tracking your business mileage might seem like a chore, but it can lead to real savings on your taxes. Whether you’re behind the wheel a little or a lot, having solid records means less stress and more money back.

If you’re unsure which method to use—or want help getting set up—Allison L. Reynolds, CPA PLLC is here to guide you. Let’s make tax time smoother, together.

Book your consultation today!