IRS Standard Mileage vs Actual Expenses
Deducting Vehicle Costs
If you use your personal car for freelance business (e.g., driving to a client meeting, a photo shoot, or dropping off inventory), the IRS allows you to deduct those costs. You can choose between two methods: The Standard Mileage Rate (deducting a fixed cent amount per mile) or the Actual Expenses method (adding up gas, repairs, and depreciation and deducting the business percentage of the total).
Frequently Asked Questions
Does commuting from home to a co-working space count?
No. The IRS strictly defines your first drive of the day (from your home to your primary office) and your last drive home as a personal commuting expense. You can only deduct drives between business sites.
Can I switch between the two methods?
If you want to use the Standard Mileage rate, you must choose it in the very first year you use the car for business. In later years, you can switch to Actual Expenses. If you choose Actual Expenses in year one, you cannot switch to Standard Mileage for that vehicle.