If you’re preparing your 2025 tax return or planning ahead for 2026, understanding mileage deduction eligibility is essential. Recent tax law changes have significantly narrowed who can claim business-related vehicle expenses. However, deductions may still be available depending on how you use your vehicle.
How Tax Law Changes Impact Mileage Deductions
Employees Can No Longer Deduct Business Mileage
In the past, employees could deduct unreimbursed mileage expenses as part of itemized deductions. However, tax reforms eliminated this option, and the restriction has now been made permanent.
As a result, employees cannot claim deductions for business mileage tied to their jobs. The only exception is when employers reimburse mileage under an accountable plan, in which case the reimbursement is not taxed.
Self-Employed Individuals Still Qualify
If you’re self-employed, you can continue to deduct vehicle expenses related to business use. These deductions reduce your taxable self-employment income.
Keep in mind:
- Commuting does not qualify
- Travel to client meetings or job sites generally qualifies
Other Situations Where Mileage May Be Deductible
Moving Expenses
Moving-related mileage deductions are now limited. They are only available to:
- Active-duty military members
- Certain intelligence personnel (starting in 2026)
Medical Travel
Driving for medical purposes remains deductible as part of itemized medical expenses. However, only the portion exceeding 7.5% of your adjusted gross income qualifies.
This threshold can make it difficult for many taxpayers to benefit.
Charitable Activities
If you use your vehicle for charitable work and are not reimbursed, you may claim those miles as a charitable deduction.
Starting in 2026, a small income-based threshold will apply to these deductions.
Standard Mileage Rates for 2025 and 2026
Instead of tracking actual vehicle expenses, many taxpayers use the standard mileage rate. These rates vary by purpose:
- Business: 70¢ (2025), 72.5¢ (2026)
- Moving: 21¢ (2025), 20.5¢ (2026)
- Medical: 21¢ (2025), 20.5¢ (2026)
- Charitable: 14¢ (2025 and 2026)
Business rates are higher because they factor in depreciation. Charitable rates are the lowest because they are not adjusted for inflation.
Parking fees and tolls may also be deducted separately when using the standard rate.
Why Recordkeeping Matters
Accurate documentation is essential for claiming mileage deductions. Without proper records, deductions may be denied.
A compliant mileage log should include:
- Date of each trip
- Number of miles driven
- Purpose of the trip
- Destination
Maintaining a log throughout the year is the simplest way to stay compliant.
Choosing the Best Deduction Strategy
Your ability to benefit from mileage deductions depends on several factors, including:
- Whether you are self-employed
- Whether you itemize deductions
- Whether your expenses exceed required thresholds
Additionally, new tax provisions may allow deductions for auto loan interest on certain vehicle purchases in 2025 and 2026.
Plan Ahead to Maximize Tax Savings
Mileage deductions can still offer valuable tax savings, but eligibility rules are stricter than in the past. Reviewing your situation now can help ensure you don’t miss available deductions.