Deduction gap, year 1$313
Before tax: standard rate $5,940, actual costs $5,627 Standard is biggerAt these inputs, the standard rate deducts about $313 more than your actual costs ($5,940 against $5,627).
At a 30 percent tax rate, that gap is worth about $94 in tax a year.
Your car costs about 70.3 cents a mile to run, before loan interest. The IRS rate used here averages 74.3 cents. That is less than the rate.
Actual costs deduct more below about 6,777 business miles a year, and the standard rate deducts more above that, with your other miles and costs as entered. You drive 8,000 business miles. In total miles, the tie is at about 13,777 miles a year.
Standard rate, a year$5,940
Miles times the IRS rate, plus parking and tolls. Actual costs, a year$5,627
Business share of the car's costs, plus parking and tolls. Gap worth in tax$94 a year
At a 30 percent tax rate. Break-even business miles6,777 miles
Actual costs deduct more below it, the standard rate above. Both deductions, one year
Business share: 53.3 percent (8,000 of 15,000 miles). Actual costs use that share of each car cost.
Lines are rounded, so they may differ from the total by a cent.| Line | Whole car, a year | Standard rate | Actual costs |
|---|
| Miles before July 1 (4,000 at 72.5 cents) | n/a | $2,900.00 | n/a |
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| Miles from July 1 (4,000 at 76 cents) | n/a | $3,040.00 | n/a |
|---|
| Fuel or charging | $2,175.00 | in the rate | $1,160.00 |
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| Repairs, oil and tires | $1,755.00 | in the rate | $936.00 |
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| Insurance | $2,098.00 | in the rate | $1,118.93 |
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| Registration and fees | $100.00 | in the rate | $53.33 |
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| Depreciation or lease | $4,422.00 | in the rate | $2,358.40 |
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| Parking and tolls (the same in both) | n/a | $0.00 | $0.00 |
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| Total | $10,550.00 | $5,940.00 | $5,626.67 |
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| Tax value at 30 percent | n/a | $1,782.00 | $1,688.00 |
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Deduction by business miles
Each line is the deduction for a year at that many business miles. Your other miles and costs are held as entered.
Deduction for a year at several business miles, with the gap and which method is bigger| Business miles | Standard rate | Actual costs | Actual minus standard | Bigger deduction |
|---|
| 3,200 | $2,376.00 | $2,915.26 | +$539.26 | Actual |
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| 6,400 | $4,752.00 | $4,838.59 | +$86.59 | Actual |
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| 6,777 (break-even) | $5,032.16 | $5,032.16 | $0.00 | Same |
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| 8,000 (you) | $5,940.00 | $5,626.67 | -$313.33 | Standard |
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| 9,600 | $7,128.00 | $6,343.63 | -$784.37 | Standard |
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| 12,800 | $9,504.00 | $7,633.20 | -$1,870.80 | Standard |
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| 16,000 | $11,880.00 | $8,797.22 | -$3,082.78 | Standard |
|---|
Over the years
Over 5 years, the standard rate deducts about $1,567 more in total ($29,700 against $28,133). At a 30 percent tax rate, that is worth about $470 in tax.
Flat-price check. Same as above.
Tax value of the gap, a month: year 1 about $8 with the standard rate, year 5 about $8 with the standard rate.
5 years, yearly rise 0 percent, parking and tolls $0 a year (the same in both columns). A plus in the last two columns means actual costs deduct more.| Year | Standard rate | Actual costs | Actual minus standard | Running total |
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| 1 | $5,940.00 | $5,626.67 | -$313.33 | -$313.33 |
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| 2 | $5,940.00 | $5,626.67 | -$313.33 | -$626.67 |
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| 3 | $5,940.00 | $5,626.67 | -$313.33 | -$940.00 |
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| 4 | $5,940.00 | $5,626.67 | -$313.33 | -$1,253.33 |
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| 5 | $5,940.00 | $5,626.67 | -$313.33 | -$1,566.67 |
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First-year rule
Which method you use in the first year can limit your choice later, so confirm the rule in IRS Topic 510 and Publication 463 (2025 edition, chapter 4), or ask a tax preparer, before you start with actual costs.
What changes the gap most
Each number is raised and lowered by a quarter, one at a time. "Better" means the gap between the two methods moves that far in that method's favor. The two that move it most are shown.
Business milesUp to $598 a year
If it were 25 percent higher, the standard rate would come out $598 better. If it were 25 percent lower, actual costs would come out $486 better. DepreciationUp to $590 a year
If it were 25 percent higher, actual costs would come out $590 better. If it were 25 percent lower, the standard rate would come out $590 better. How this estimates
Standard rate. Business miles driven before July 1 times the early rate, plus miles from July 1 times the later rate (the IRS ties each rate to when the expense is incurred, Announcement 2026-11), plus parking and tolls.
Actual costs. The whole car's yearly costs: fuel (miles divided by miles per gallon, times the price), repairs, oil and tires, insurance, fees and depreciation. Take the business share (business miles divided by all miles) and add parking and tolls. Loan interest is left out of both sides because it is deductible either way (Publication 463).
The gap. Actual costs minus the standard rate. It equals business miles times (your cost of a mile minus the IRS rate): your cost of a mile decides the winner and business miles set the size. The tax value is the gap times your tax rate, a rough guide and not your tax bill.
Break-even. The business miles where the two are equal, with your other miles and costs as entered: yearly fixed costs divided by (IRS rate minus fuel and repairs per mile), minus other miles. If fuel and repairs alone cost at least the rate, actual costs always deduct at least as much.
Over the years. The same miles each year. The IRS rate, fuel, repairs, insurance, fees and parking rise by the yearly rise; depreciation or lease payments stay flat. The flat-price line repeats the total with no rise.
Notes
- Both methods need a log of business miles; actual costs also need receipts. Parking and tolls are deductible either way.
- The standard rate already includes depreciation, 35 cents a mile for 2026 (Notice 2026-10; the July change left it alone). It also lowers what you can count as the car's cost if you sell it.
- Lease: type 12 months of payments in the depreciation box. Leased cars have their own IRS rules, which this page does not apply (see First-year rule above).
- Cars have yearly depreciation caps, and a car over 6,000 pounds follows other rules. This page applies no cap. The limits are in Publication 463 (2025 edition).
What this leaves out
The car's price, loan, trade-in and sales tax (depreciation is one number you type), loan interest, personal property tax, more than one car, employer reimbursement and state rules. Commuting to your usual workplace is not business mileage; leave it in other miles.
Not verified
No screen reader has been run on this page. Not opened: the IRS news releases IR-2026-29 and IR-2025-128, the 2026 federal bracket table, AAA's own 2026 fact sheet, and any New York insurance average or state rule for this deduction. Not known: whether the straight-line-only first-year case keeps the standard rate open, and the 2027 IRS rate.
Sources and date checked
Every starting value is in the table below with its source, status and the date checked. The IRS rates are valid through 2026-12-31. AAA and CarPro appear only as dated sources; this page recommends no company or app.
An estimate from the numbers you typed. Not tax advice. Confirm with IRS Publication 463 or a tax preparer.
Benchmark sources and dates
Starting assumptions are example benchmarks, not binding quotes. Change any input to match your own bills or offers.
| Assumption / Input | Starting value | Source | Checked |
|---|
| IRS rate through June 30 | $0.725 a mile (72.5 cents), for miles driven January 1 to June 30, 2026. IRS, read. | IRS, standard mileage rates and IRS Notice 2026-10 | 2026-10-18 |
| IRS rate from July 1 | $0.76 a mile (76 cents), for miles driven on or after July 1, 2026. Valid through 2026-12-31. IRS, read. | IRS, Announcement 2026-11 in Internal Revenue Bulletin 2026-29 and IRS, standard mileage rates | 2026-10-18 |
| Share of business miles from July 1 | 50 percent. Typical, edit this. | A calendar count, not a survey: 184 of 365 days fall on or after July 1 (50.4 percent) | 2026-10-18 |
| Business miles a year | 8,000. Typical, edit this. | No survey. IRS Publication 463 (commuting is not business mileage) | 2026-10-18 |
| Other miles a year | 7,000. Typical, edit this. | AAA study uses 15,000 miles a year in all. AAA Northeast, copy of the 2026 release | 2026-10-18 |
| Depreciation or lease a year | $4,422. A stand-in for a new car's average yearly loss in value, not a tax figure. | AAA Northeast, copy of the AAA release of 2026-09-15; AAA's own newsroom page was not opened | 2026-10-18 |
| Insurance a year | $2,098. Typical, edit this. Second-hand. | CarPro, report on the AAA 2026 study, dated 2026-10-01 | 2026-10-18 |
| Registration and fees a year | $100. Typical, edit this. | New York DMV, passenger vehicle registration fees (the page carries no date) | 2026-10-18 |
| Miles per gallon | 30. Typical, edit this. The EPA benchmark the site uses for a gasoline car; not re-checked since 2026-10-08. | U.S. EPA, fueleconomy.gov | 2026-10-08 |
| Fuel price | $4.35 a gallon of regular gasoline (U.S. average, EIA weekly, 2026-10-05). New York $4.38 (2026-10-08). | U.S. EIA, gasoline and diesel fuel update | 2026-10-16 |
| Repairs, oil and tires | $0.117 a mile (11.7 cents). Typical, edit this. Second-hand. | CarPro, report on the AAA 2026 study, dated 2026-10-01 | 2026-10-18 |
| Tax rate | 30 percent. Typical, edit this. Type 0 to turn the tax value off. The state part is unverified. | IRS, Topic 554, self-employment tax and IRS, federal income tax rates and brackets | 2026-10-18 |
| Parking and tolls a year | $0. Starts at 0. | IRS, Topic 510 | 2026-10-18 |
| Years to compare | 5. Typical, edit this. | AAA Northeast, copy of the 2026 release | 2026-10-18 |
| Yearly rise | 0 percent. Starts at 0 because no source for a rise was checked. | Not a sourced input | 2026-10-18 |
| First-year rule (linked, not a default) | A heading and links to IRS Topic 510 and Publication 463 (2025 edition). The rule is not quoted or decided on the page. IRS, read. | IRS, Topic 510 (reviewed 09-Oct-2026) and IRS, Publication 463 (2025 edition) | 2026-10-18 |
| Employees (note only) | Most employees cannot deduct unreimbursed car costs. IRS, read. | IRS, Topic 510 and IRS Notice 2026-10 | 2026-10-18 |