See which method gives the bigger 2026 deduction for your car, what it saves in tax, and what the choice locks you into. Uses both 2026 IRS rates, MACRS depreciation and the 2026 caps.
Your car
2026 miles
Business and personal combined. Business use: 81.8%. Driving from home to your first pickup usually counts as personal.
2026 car costs, all driving
Deductible under both methods
The value-based part of your registration, if your state charges one. Flat fees go above.
Depreciation
The lower of what you paid or its market value when business use began.
Bonus applies unless you elect out, and electing out covers all 5-year property you placed in service in 2026, not just this car.
Tax effect
Your 2026 gig earnings minus costs like phone and platform fees, before any car deduction.
Bigger 2026 deduction
Standard mileage
Standard mileage
Actual expenses
What this choice locks in
Choosing the standard rate this year keeps both options open: you can switch to actual expenses in a later year, using straight-line depreciation. Choosing actual expenses in the car’s first business year means it can never use the standard rate.
The standard rate also reduces the car's basis by $6,300 (35¢ per business mile), which matters when you sell the car or switch methods.
Estimate only, not tax advice. Tax year 2026, one vehicle of 6,000 lb or less (unloaded weight for cars, gross vehicle weight rating for trucks and vans), fewer than five vehicles in the business. Does not model Section 179, heavy SUVs, lease inclusion amounts or depreciation recapture. Confirm with a tax professional.
Every self-employed driver deducts car costs one of two ways on Schedule C. The choice you make in a car's first year of business use decides which options you keep.
Business miles times the IRS rate: 72.5¢ for miles driven January through June 2026 and 76¢ from July. The rate covers gas, insurance, repairs, registration and depreciation. Only a mileage log is required. The 2026 split, explained →
Your real costs for the year times your business-use percentage, plus depreciation on the car, or lease payments if you lease. It can beat the rate for costly cars, but it needs receipts for everything.
Business parking and tolls, the business share of car loan interest, and the business share of value-based vehicle property tax. These are added on top of either method.
| Item | 2026 amount |
|---|---|
| Business rate, Jan 1 – Jun 30 | 72.5¢ per mile |
| Business rate, Jul 1 – Dec 31 | 76¢ per mile |
| Depreciation component of the rate | 35¢ per mile |
| First-year depreciation cap, with bonus | $20,300 |
| First-year depreciation cap, no bonus | $12,300 |
| Cap in year 2 / year 3 / later years | $19,800 / $11,900 / $7,160 |
| Bonus depreciation, bought after Jan 19, 2025 | 100% |
| Bonus depreciation, bought earlier, first business use in 2026 | 20% |
| MACRS first year, 5-year property, half-year convention | 20% |
Depreciation caps apply to passenger vehicles of 6,000 lb or less (unloaded weight for cars, gross vehicle weight rating for trucks and vans) and are reduced to your business-use percentage. The mid-quarter convention changes the first-year rate if more than 40% of your 2026 depreciable basis was placed in service in October–December. Business use of 50% or less requires straight-line (ADS) depreciation with no bonus.
The calculator compares one tax year, 2026. It applies each IRS rate to the miles driven in its half of the year, takes your business-use percentage from your mileage, and computes first-year depreciation with the MACRS tables, the 2026 caps and bonus depreciation at the rate set by when you bought the car. A personal car converted to business use is depreciated from the year of conversion, on the lower of its cost or its value at conversion. Tax savings use 2026 federal brackets, self-employment tax and the qualified business income deduction. For a car with prior years of depreciation, enter the amount from your depreciation schedule.
Last reviewed October 2026.
For most high-mileage gig drivers in modest, fuel-efficient cars, the standard mileage rate gives the bigger deduction, because 2026 pays 72.5 cents per business mile through June and 76 cents from July. Actual expenses can win with an expensive or costly-to-run car, fewer miles, or a first year with bonus depreciation. Because the answer depends on your own costs and miles, compare both before you file.
For a car you own, using the standard rate in the first year keeps both options open: in a later year you can switch to actual expenses, but depreciation must then be straight-line. If you use actual expenses in the car’s first year of business use, you can never use the standard rate for that car. For a leased car, choosing the standard rate means using it for the entire lease, including renewals.
Business parking fees and tolls, the business share of interest on a car loan if you are self-employed, and the business share of value-based personal property tax on the vehicle. Gas, insurance, repairs, registration fees, depreciation and lease payments are already included in the standard rate, so they cannot be deducted separately.
Divide your business miles for the year by the total miles you drove the car that year. Driving from home to your first pickup and home after your last drop-off is usually commuting, which is personal. Under actual expenses, most car costs are deductible only in that percentage.
For passenger vehicles placed in service in 2026, 6,000 pounds or less (unloaded weight for cars, gross vehicle weight rating for trucks and vans), Rev. Proc. 2026-15 caps first-year depreciation at $20,300 with bonus depreciation or $12,300 without, then $19,800 in year two, $11,900 in year three and $7,160 each year after. Each cap is reduced to your business-use percentage.
Both methods need a mileage log showing the date, miles and business purpose of your driving, plus total miles for the year. Keep receipts for parking and tolls and records of loan interest and property tax under either method. Actual expenses also need receipts for every car cost you claim and records of what you paid for the car.
Want your tax savings instead? Try the gig driver tax calculator, or read about deadhead miles.