But once you start tracking work trips-attending conferences, visiting far-flung clients or vendors-the standard mileage rate can take a significant chunk out of your tax obligation. The standard rate is tied to inflation, so it will continue increasing each year.įor quick trips around town, this may not add up to much. For the 2020 tax year, the rate was 57.5 cents per mile. You deduct mileage from your taxes using a standard per-mile rate. You can only deduct the 30 miles you travelled for business. Keep in mind that the mileage you deduct has to be “ordinary and necessary.” If you drive 15 miles to pick up inventory from a vendor, and drive 15 miles back to your place of work, you can deduct 30 miles total.īut if you take a 10 mile detour on the way back so you can visit your favorite bubble tea shop, that extra mileage can’t be deducted.
Meeting with clients, making a sales call, visiting the post office to send shipment to customers-these are all day-to-day examples of when you might apply the mileage tax deduction. One condition: The trip has to be for work purposes. If you’re self-employed, any time you leave your business location-even if that business location is your house-you can deduct your mileage.
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