The 2026 business mileage rate is 72.5 cents a mile, and almost everybody values it wrongly. It does not save you your tax bracket, which is what a deduction is worth to somebody on a salary. It also does not save you your bracket plus 15.3%, which is what every freelance-tax article will tell you. The real answer sits between the two, and the reason is worth two minutes of your life.More
A sole proprietor's deduction comes off Schedule C, so it lands before self-employment tax as well as before income tax. That is why the salary answer is too low. But two things then claw money back. Half of your self-employment tax is itself deductible, so cutting your profit by a dollar shrinks that deduction and pushes your taxable income back up by about 7 cents. And the 20% qualified business income deduction is twenty percent OF YOUR PROFIT, so cutting the profit cuts the QBI deduction too, handing back another 18.6 cents. Put it together and a dollar of deduction lowers your taxable income by roughly 74 cents rather than by a dollar. In the 22% bracket the deduction is worth about 30.5 cents, not 22 and not 36. Every constant in that sentence is statutory. None of it is ours.
What the miles save you
$2,210
Self-employment tax the miles save you$1,024
Income tax the miles save you, after the half-SE add-back and the QBI clawback$1,186
A dollar of deduction does not cut your taxable income by a dollar. It cuts it by
about 74 cents. Half of the self-employment tax you just saved was itself deductible, so losing that deduction pushes
your taxable income back up by around 7 cents. And the 20% qualified business income deduction is twenty percent OF
YOUR PROFIT, so a smaller profit means a smaller QBI deduction, handing back another 18.6 cents.More
Which makes both of the popular answers wrong, in opposite directions. "A deduction saves
you your tax bracket" is what it is worth to somebody on a salary, and it is too LOW for a sole proprietor, because
a Schedule C deduction lands before self-employment tax as well. "So add 15.3% to your bracket" is what almost every
freelance-tax article says, and it is too HIGH, because of the two clawbacks above. In the 22% bracket the truth is
about 30.5 cents on the dollar: not 22, and not 36.
There is a ceiling, and above it the miles are worth much less. Once net earnings pass $184,500 in
2026, the 12.4% social security half of self-employment tax stops and only the 2.9% Medicare half carries on. A
deduction taken above that ceiling saves 2.68% of SE tax rather than 14.13%. The page switches when your profit
crosses it.
And if your QBI deduction is limited, the miles are worth MORE than this page says. Above the QBI
threshold the 20% starts to phase out and becomes entangled with wages and property, and this page does not model
that. It applies the full 20% clawback regardless, which understates your saving rather than overstating it. That is
the direction we would rather be wrong in.
§ 02 What the miles are worth
The deduction itself, at 72.5 cents a mile$7,250
What a dollar of deduction saves you, in cents30.5%
What each mile is actually worth to you$0.22
If you believed the bracket-plus-15.3% answer, you would expect$2,704
Every figure on this page is an IRS figure. The mileage rate, the self-employment tax rate, the 92.35% factor, the wage base, the QBI rate and the brackets are all statutory, and none of them is ours. What the page adds is the arithmetic that connects them, which is the part almost everybody gets wrong.
Recommended next steps
At this level the mileage deduction is one of the larger things on your return, and a reconstructed log is a poor defence for it. Use an app that logs from your phone. The subscription is trivial against what is at stake, and a contemporaneous record is worth vastly more than a spreadsheet you assembled in April.
A dollar of Schedule C deduction cuts your taxable income by about 74 cents, not by a dollar.More
Two clawbacks do it. Half of your self-employment tax is an above-the-line deduction, so when a business deduction shrinks your SE tax, it also shrinks that half-SE deduction, pushing taxable income back up by about 7 cents. And the 20% QBI deduction is twenty percent of your qualified business income, so a smaller profit produces a smaller QBI deduction, handing back another 18.6 cents. Both are statutory, both are in the same direction, and almost nobody mentions either.
In the 22% bracket, a dollar of deduction is worth about 30.5 cents. Not 22, and not 36.More
22 cents is what a deduction is worth to an employee, and it is too low for a sole proprietor, because a Schedule C deduction lands before self-employment tax. 36 cents is what you get if you naively add 15.3% to the bracket, and it is what most freelance-tax articles tell you, and it is too high because of the clawbacks. The real figure is the self-employment saving of 14.13% plus 22% of the 74 cents that taxable income actually fell by.
The 2026 business mileage rate is 72.5 cents a mile. It is set by the IRS, in a notice, once a year.More
IRS Notice 2026-10. It is a single rate covering fuel, wear, insurance, depreciation and everything else, and it is the simple method: multiply the business miles by the rate and deduct the result. The charitable rate is 14 cents, the medical and moving rate is 20.5 cents, and both are different numbers for different journeys.
Above $184,500 of net earnings, the miles are worth much less, and the page switches.More
That is the 2026 social security wage base. Below it, self-employment tax is the full 15.3% and a deduction saves 14.13% of itself. Above it, the 12.4% social security half has already stopped and only the 2.9% Medicare half continues, so the same deduction saves 2.68%. Same mile, same rate, a fifth of the SE saving, purely because of where it lands.
The commute is not a business mile, however far it is.More
Home to a regular place of work and back is commuting, and it is not deductible. This is the thing people get wrong most expensively, because for many freelancers it is the biggest single block of driving they do. But if your home is your principal place of business, then a trip from it to a client can be a business mile from the front door, which is a meaningful advantage and one worth understanding properly.
If your QBI deduction is limited or phased out, the miles are worth MORE than this page says.More
Above the QBI threshold the 20% begins to phase out and gets entangled with W-2 wages and property, and this page does not model any of that. It applies the full 20% clawback in every case, which understates what you save rather than overstating it. Given a choice of which way to be wrong about somebody's tax bill, that is the one to pick.
Sourced, all of it: the 72.5 cents a mile (IRS Notice 2026-10), the 15.3%
self-employment tax on 92.35% of net earnings (Schedule SE), the $184,500 social security wage base, the deductible
half of SE tax, the 20% QBI rate and the 2026 brackets (Revenue Procedure 2025-32). Ours: nothing.
There is no model of ours here. It is the tax code, applied to your miles.More
The standard rate against actual expenses. This page uses the standard mileage rate, which
is the simple method and the one that most people should take. The alternative is to deduct the actual cost of running
the car (fuel, insurance, repairs, depreciation) apportioned to business use, and for an expensive vehicle driven few
miles it can be worth considerably more. The two methods have rules about switching between them, and if you are
weighing them seriously it is a conversation with an accountant rather than a page like this one.
The commute is not deductible, and this catches people every year. Home to a regular workplace is
commuting, however far it is, and it is not a business mile. If your home IS your principal place of business, then
trips from it to a client can be business miles from the front door, which is a genuinely valuable difference.
Keep the log. Date, mileage, destination, purpose. It is the first thing the IRS asks for in an
audit and it is the thing people reconstruct from memory in April. An app that does it from your phone's location is worth its subscription many
times over, and there are free ones.
Where every number above comes from
IRS
IRS, Notice 2026-10, 2026 Standard Mileage Rates. Business: 72.5 cents per mile. Charitable: 14 cents. Medical and moving: 20.5 cents
IRS, Schedule SE (Form 1040), Self-Employment Tax. Self-employment tax is 15.3% (12.4% social security plus 2.9% Medicare), levied on 92.35% of net earnings. Half of it is an above-the-line deduction
IRS, Publication 15 (2026), Employer's Tax Guide. The 2026 social security wage base is $184,500, above which the 12.4% social security portion stops and only the 2.9% Medicare portion continues
IRS, Revenue Procedure 2025-32. The 2026 income tax brackets, and the qualified business income (QBI) thresholds at which the 20% deduction begins to phase out: $201,750 single, $403,500 married filing jointly
Every one of these is a place the number could be off. They are here because you should be able to check our working, not because we are hedging.
The QBI deduction is assumed to apply in full, which UNDERSTATES what you save if it does not.
Above the QBI threshold the 20% phases out and becomes entangled with wages and property, and this page does not model that. It applies the full 20% clawback in every case. If your QBI is limited, the deduction is worth more than the page says, never less. That is the direction we would rather err in when the subject is somebody's tax bill.
The social security wage base IS handled, and it changes the answer a great deal.
Above $184,500 of net earnings, a deduction saves 2.68% of self-employment tax rather than 14.13%, because the 12.4% social security half has already stopped. The page switches on your net profit input.
Federal only. Your state may also tax the profit, and the miles may save you there too.
A state that taxes income generally starts from a federal figure, so a Schedule C deduction often flows through to the state return as well. We have not read your state's rules, so this page counts none of it, which means your real saving is probably a little higher than the number here rather than lower.
This uses the STANDARD mileage rate, not actual expenses.
The alternative is to deduct the real cost of running the vehicle apportioned to business use. For an expensive car driven few miles it can be worth considerably more, and there are rules about switching between the methods. If that is your situation, it is worth an accountant rather than a web page.
The bracket is the one you pick, and it is the MARGINAL rate.
The rate your last dollar is taxed at, not your average. Being one band out changes the answer by a few cents a mile, so the page does not fuss about it, but it is worth knowing which number you gave it.
Frequently asked questions
How much is the mileage deduction worth?
Less than the popular answer and more than the salaried one. The 2026 rate is 72.5 cents a mile, so 10,000 business miles is a $7,250 deduction. But a deduction is not cash: it is worth whatever tax it saves you. For a sole proprietor in the 22% bracket that is about 30.5 cents on the dollar, so $7,250 of deduction saves roughly $2,210. It is not 22 cents (that is what a deduction is worth to an employee, and it ignores the self-employment tax the deduction also dodges) and it is not 36 cents (that is bracket plus 15.3%, which is what most freelance-tax articles say, and it ignores two clawbacks).
Why is a deduction worth more to a freelancer than to an employee?
Because it comes off Schedule C, which sits ahead of both taxes. An employee's deduction, if they can take one at all, only reduces income tax. A sole proprietor's business deduction reduces the profit that self-employment tax is charged on as well, and self-employment tax is 15.3% levied on 92.35% of that profit, which is 14.13% of it. So the same dollar works twice. It just does not work quite as hard as people think, because half of the SE tax you saved was itself deductible, and because the 20% QBI deduction shrinks along with your profit.
What are the two clawbacks?
First, half of your self-employment tax is an above-the-line deduction. So when a business deduction cuts your SE tax, it also cuts that half-SE deduction, pushing your taxable income back up by about 7 cents on the dollar. Second, the 20% qualified business income deduction is twenty percent OF your qualified business income, so a smaller profit gives a smaller QBI deduction, handing back another 18.6 cents. Together they mean a dollar of deduction only lowers taxable income by about 74 cents. Both are statutory, and neither is mentioned in most of what you will read about freelance tax.
Is the drive to my office deductible?
No. Home to a regular place of work and back is commuting, however far it is, and the IRS does not allow it. That is the mistake that costs people the most, because for many self-employed people the commute is the biggest block of driving they do. But there is a real advantage hiding here: if your home is your principal place of business, then a trip from home to a client can be a business mile from the front door rather than a commute. It is worth understanding that distinction properly, because it can be the difference between a few hundred deductible miles and a few thousand.
What is the 2026 IRS mileage rate?
72.5 cents a mile for business driving, set in IRS Notice 2026-10. The charitable rate is 14 cents a mile and the medical and moving rate is 20.5 cents. They are different rates for different journeys and the business one is by far the largest. The business rate is meant to cover everything: fuel, insurance, repairs, tyres, depreciation. That is why the alternative method, deducting actual expenses, requires you to track all of it rather than just the miles.
