Introduction
If you use your vehicle or travel for business purposes, the IRS allows you to deduct business mileage and travel expenses to lower your taxable income. According to IRC § 162(a), ordinary and necessary business expenses, including mileage, airfare, lodging, and meals, are deductible.
To claim these expenses properly on Form 1040, you must keep accurate records, use the correct deduction method, and file the appropriate tax forms. This guide explains how to maximize business mileage and travel deductions in 2025.
Who Can Claim Business Mileage and Travel Expenses?
You can claim business mileage and travel expenses if you are:
- Self-employed, freelancer, or independent contractor (Schedule C filer)
- A small business owner who drives for work
- A real estate agent, rideshare driver, or consultant
- An employee who is NOT reimbursed by an employer
If your employer reimburses you, you cannot deduct business mileage or travel expenses.
What Business Travel Expenses Are Deductible?
1. Business Mileage Deduction (IRC § 162(a))
If you drive for business purposes, you can deduct vehicle expenses using one of two methods:
- Standard Mileage Rate (2025 IRS Rate):
- $0.67 per mile for business miles driven
- Includes gas, maintenance, insurance, depreciation
- Actual Expense Method:
- Deducts a percentage of actual vehicle expenses, including:
- Gas, repairs, insurance, lease payments
- Depreciation (if you own the vehicle)
- Loan interest (for business-use portion)
Tax Forms: Schedule C (Form 1040), Form 4562 (if claiming depreciation)
Keywords: mileage deduction, IRS standard mileage rate, self-employed car expenses
2. Business Travel Expenses (IRC § 162(a))
You can deduct 100% of travel expenses if your trip is primarily for business and is considered “ordinary and necessary.”
- Transportation – Airfare, train, bus, rental cars
- Lodging – Hotels, Airbnb, and motels for business stays
- Meals – 50% deductible for business-related meals
- Wi-Fi, phone, and conference fees
Tax Forms: Schedule C (Form 1040)
Keywords: business travel tax deduction, self-employed travel expenses, tax write-off for travel
3. Local Transportation Costs
Taxis, Ubers, Lyfts, public transportation for business purposes
- Parking fees and tolls (excluding commuting costs)
- Tax Forms: Schedule C (Form 1040)
Keywords: rideshare tax deduction, business taxi expenses, deductible tolls
4. Per Diem Rates for Travel (IRC § 274(d))
Instead of keeping detailed records for meals and lodging, self-employed taxpayers can use per diem rates set by the IRS.
- Per diem rates vary by location and cover lodging, meals, and incidental expenses.
- Employees cannot use per diem rates unless reimbursed by an employer.
Tax Forms: Schedule C (Form 1040)
Keywords: per diem deduction, IRS travel rates, business lodging write-off
5. Travel Expenses for Conferences & Training
You can deduct:
- Registration fees for business seminars and workshops
- Hotel and transportation costs for attending industry events
Tax Forms: Schedule C (Form 1040)
Keywords: conference tax write-off, business seminar deduction, professional development tax deduction
What Business Mileage and Travel Expenses Are NOT Deductible?
- Commuting Costs – Driving from home to work is NOT deductible (IRC § 262)
- Family Travel Expenses – If a spouse or child accompanies you, only your portion is deductible
- Luxury Expenses – First-class airfare or five-star hotels must be reasonable for business travel
Step-by-Step Guide to Claiming Mileage & Travel Deductions
Step 1: Track Business Mileage and Travel Expenses
- Keep a detailed mileage log (date, destination, purpose, miles driven).
- Save receipts for flights, hotels, meals, and local transport.
Step 2: Choose Between the Standard Mileage Rate or Actual Expenses
- Use standard mileage if you drive less than 50% for business.
- Use actual expenses if you own the car and have high maintenance costs.
Step 3: Report Mileage and Travel Deductions on Schedule C
- Schedule C (Form 1040): Report all business-related vehicle and travel costs.
- Form 4562: If claiming depreciation for a business vehicle.
Step 4: Keep Proper Tax Records for IRS Compliance
- Maintain mileage logs for at least 3 years in case of an audit.
- Use mileage tracking apps (e.g., MileIQ, QuickBooks Self-Employed).
IRS Forms & Compliance Checklist
- Schedule C (Form 1040) – Report business travel and mileage deductions
- Schedule SE (Form 1040) – Self-employment tax
- Form 4562 – Depreciation for business vehicles
- Per Diem IRS Rates – For self-employed travel deductions
Conclusion
Claiming business mileage and travel deductions correctly can significantly lower your taxable income. By tracking mileage, keeping receipts, and filing the correct tax forms, you can maximize deductions and stay IRS-compliant.
For expert tax planning, schedule a consultation with Anshul Goyal, CPA EA FCA, a licensed tax professional and IRS representative.
Frequently Asked Questions (FAQs)
1. Can I deduct mileage if I work from home?
Yes, if you travel from your home office to a client’s location or business-related meetings.
2. How do I track my business miles?
Use a mileage tracking app like MileIQ or keep a written log with date, miles, and business purpose.
3. Can I deduct my car insurance?
Yes, if using the actual expense method, you can deduct the business-use percentage of car insurance.
4. What if I travel for both business and personal reasons?
You can only deduct the business portion of transportation, lodging, and meals.
5. How long should I keep mileage and travel records?
The IRS recommends keeping records for at least 3 years.
About Our CPA
Anshul Goyal, CPA EA FCA is a licensed Certified Public Accountant and an IRS Enrolled Agent (EA). He specializes in self-employment taxes, IRS compliance, and business tax deductions, helping freelancers, consultants, and small business owners reduce their tax burden.
Schedule a consultation today with Anshul Goyal, CPA, to optimize your tax deductions!