Most gig workers save more with the standard mileage rate — 72.5 cents per mile in 2026. It is simpler, requires only tracking miles, and usually exceeds actual costs for fuel-efficient vehicles. Actual expenses may win if you drive a new expensive vehicle with high insurance and want large first-year depreciation.
The Two Methods at a Glance
✅ Standard Mileage Rate
- 72.5¢ per business mile (2026)
- Just track your miles
- No receipts needed for car costs
- Works for any vehicle type
- Best for most gig workers
📊 Actual Expense Method
- Deduct real costs × business %
- Track gas, insurance, repairs, etc.
- Keep all receipts all year
- Can include depreciation
- Better for expensive vehicles
What's Included in Each Method
| Expense | Standard Mileage | Actual Expenses |
|---|---|---|
| Gasoline / charging costs | ✅ Included in rate | ✅ Deduct separately |
| Oil changes & maintenance | ✅ Included in rate | ✅ Deduct separately |
| Tires | ✅ Included in rate | ✅ Deduct separately |
| Car insurance | ✅ Included in rate | ✅ Deduct separately |
| Registration fees | ✅ Included in rate | ✅ Deduct separately |
| Depreciation | ✅ Included in rate | ✅ Deduct separately (larger in year 1) |
| Parking fees & tolls | ✅ Deduct separately | ✅ Deduct separately |
| Loan interest | ✅ Deduct separately | ✅ Deduct separately |
| Car wash | ❌ Included — no extra deduction | ✅ Deduct separately |
Real-World Comparison: Which Wins?
Example 1: DoorDash Driver, Toyota Prius, 20,000 business miles
Actual costs: $1,200 gas, $400 insurance portion, $300 maintenance, $2,000 depreciation = $3,900. Business use = 70%.
Example 2: Uber Driver, New BMW (Year 1), 30,000 business miles
Actual costs: $3,500 gas, $2,000 insurance, $500 maintenance, $15,000 depreciation (Section 179). Business use = 90%.
Example 3: Uber Black Driver, New Mercedes, 25,000 business miles, 95% business use
Actual costs: $4,000 gas, $3,000 insurance, $800 maintenance, $20,000 Section 179 deduction. Business use = 95%.
Standard mileage wins for most gig workers with fuel-efficient vehicles doing high mileage. Actual expenses wins when you have a new expensive vehicle that you use almost exclusively for business and want to take large depreciation in year one.
The Switching Rules: Read This Before You Choose
This is where many gig workers make a costly mistake. The IRS has specific rules about switching between methods:
- Starting with standard mileage: You can switch to actual expenses in a later year, but must use straight-line depreciation going forward
- Starting with actual expenses: If you claimed Section 179 or bonus depreciation, you generally cannot switch to standard mileage for that vehicle
- Leased vehicles: If you use standard mileage in the first year, you must use it for the entire lease period
Run the numbers before your first tax return with a new vehicle. The choice you make in year one can lock you in. For most gig workers, standard mileage is the safer, simpler, and usually better choice.
How to Track Miles (The Right Way)
Whether you use standard mileage or actual expenses, you need a mileage log. The IRS requires documentation of:
- Date of each trip
- Business purpose
- Starting and ending odometer reading (or total miles)
- Destination
Best mileage tracking apps for gig workers: Stride (free), MileIQ, Everlance, or simply use the in-app reports from DoorDash/Uber as a starting point (remember: they undercount).
Frequently Asked Questions
Can I use standard mileage for an EV?
Yes. The standard mileage rate (72.5¢/mile) applies to all vehicles including electric cars. For EVs with near-zero "fuel" costs, the gap between actual cost and the standard rate is even larger — making standard mileage especially profitable for EV owners.
What if I use my car for both personal and business?
With standard mileage, you simply only count business miles. With actual expenses, you multiply costs by your business-use percentage (business miles ÷ total miles). Keep a mileage log regardless.
Can I deduct parking and tolls with standard mileage?
Yes! Parking fees and tolls are deductible in addition to the standard mileage rate — they're not included in the 72.5¢ rate. Keep receipts for these.
I just started dashing. Which method should I use?
Start with standard mileage. It's simpler, and for new gig workers with typical vehicles, it almost always produces the larger deduction. You can always switch to actual expenses in future years if your situation changes.
Not Sure Which Method to Use?
ClickTaxEasy can help you calculate which vehicle deduction method saves you more based on your specific miles and vehicle. Ask for free.
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