Stop Leaving Money at the Pump: How to Write Off Gas as a Business Expense

With gas prices hitting near-record highs, here is how to make every mile you drive work harder for your bottom line.

Let’s start with where we are right now. As of May 2026, the national average for a gallon of regular gasoline is $4.52, up 25 cents for the second consecutive week and $1.40 higher than it was just one year ago. California, as always, is worse. The statewide average is $6.16, making it the most expensive state in the country for fuel. In Los Angeles, prices at certain stations are sitting well above seven dollars a gallon.

This is not random. Since conflict disrupted traffic through the Strait of Hormuz in early 2026, a waterway responsible for moving roughly 20 million barrels of oil per day, fuel prices in the United States have surged more than 53 percent. U.S. gasoline stocks have declined for eleven straight weeks.

So yes, it is bad. And no, it is not getting better overnight. But here is what we need to talk about: if you are an entrepreneur and you are not writing off your gas costs, you are paying more than you have to. The prices are not going down, but your tax bill can.

This Is Not a Loophole. It Is the Law.

The IRS allows business owners to deduct the cost of using their personal vehicle for business purposes. This is not a trick or a gray area. It is a standard deduction that millions of self-employed people and small business owners use every single year. The issue is that too many of us are either not tracking our miles or not claiming the deduction at all.

For 2026, the IRS standard mileage rate is 72.5 cents per mile for business use, up from 70 cents in 2025, specifically because vehicle and fuel costs have risen. Every business mile you drive is worth 72.5 cents off your taxable income.

To be clear: this is a deduction against your taxable income, not a dollar-for-dollar refund. But it meaningfully reduces what you owe. If you are self-employed and paying both income tax and self-employment tax, these deductions add up fast.

Here is what the numbers look like at 72.5 cents per mile:

Note: The tax savings column is an estimate based on a 25 percent effective tax rate. Your actual savings depend on your total income, filing status, and deductions. Consult a tax professional for your specific situation.

First Things First: Does This Apply to You?

Before we go further, let’s confirm this deduction is available to you. You can claim vehicle deductions on your federal tax return if you are:

• A sole proprietor running a business under your own name or a DBA (doing business as)
• An LLC owner filing as a sole proprietor or partnership
• A 1099 independent contractor in any industry
• A freelancer, consultant, or gig worker
• An S-corp owner-employee who uses your personal vehicle for business (rules differ slightly; talk to your accountant)

You cannot claim this deduction if you are a W-2 employee, even if your employer requires you to drive. If that is your situation, check whether your employer offers a mileage reimbursement program. That is a separate conversation with HR.

If you are not sure which category you fall into, that is the first thing to figure out before tax time. The IRS self-employed tax center (linked in the resources section below) has a plain-language breakdown.

What Counts as a Business Mile?

A lot of entrepreneurs leave deductions on the table because they do not know what qualifies. Here is a complete breakdown.

These count as business miles:

• Driving to meet a client or attend a business meeting
• Picking up supplies, inventory, or materials for your business
• Traveling to a conference, pop-up, trade show, or networking event
• Driving to the bank, post office, or print shop on business-related errands
• Delivering a product or service to a customer
• Driving to a vendor, wholesale supplier, or co-working space
• Site visits or property tours that are directly business-related

These do NOT count:

• Your regular commute from home to a fixed office location
• Personal errands, even if run on the way home from a client visit
• Driving your children to school or running household errands

Standard Mileage Rate vs. Actual Expenses: Which Method Is Right for You?

The IRS gives you two options for claiming your vehicle costs. You need to understand both before choosing because once you pick a method for a vehicle in its first year of use, switching later has restrictions.

Option 1: The Standard Mileage Rate (72.5 cents per mile in 2026)

This is the simpler method. You track your business miles, multiply by 72.5 cents, and that is your deduction. You do not need to save every gas receipt or calculate what percentage of your insurance or oil changes were business-related.

This works well if: your car is relatively fuel-efficient, you drive a moderate amount for business, and you prefer a straightforward calculation at tax time.

Option 2: The Actual Expense Method

This method lets you deduct the real cost of operating your vehicle for business purposes, which can include gas, oil changes, insurance, registration fees, repairs, tires, and depreciation. You calculate the percentage of your total miles that were business miles, then apply that percentage to your total vehicle costs.

Example: If you drove 12,000 miles total in a year and 6,000 were business miles, your business use percentage is 50 percent. You can deduct 50 percent of your total vehicle operating costs for the year.

This works well if your vehicle is older or high-mileage, your maintenance costs are high, or a large share of your total driving is business-related. The deduction can be significantly larger than the standard rate, but it requires more documentation.

Which Should You Choose?

For most small business owners and freelancers, the standard mileage rate is the easier choice and still generates a meaningful deduction. But if you suspect your actual vehicle costs are high, consult an accountant before filing. You want to choose the method that puts the most money back in your pocket, legally and accurately.

How to Track Your Miles: From Low-Tech to Automatic

The IRS requires you to keep a mileage log. For each business trip, the log needs to include: the date, your starting point, your destination, the business purpose of the trip, and the number of miles driven. Here is every way you can do that.

Option 1: A Paper Mileage Log

Old school works. You can buy a dedicated mileage log book at any office supply store (Staples, Office Depot, Amazon) for under $10. It will have columns for date, destination, purpose, starting odometer, ending odometer, and total miles. Fill it in every time you get in the car for business.

Some receipt books sold for small businesses include a mileage tracking section. This is a solid, zero-cost option if you are consistent about it. The drawback: if you forget to log a trip in the moment, you cannot reconstruct it later without supporting documentation.

Option 2: A Notes App or Spreadsheet

A simple note in your phone works if you are disciplined. Create a note labeled “Business Miles 2026” and log each trip as you go: date, where you went, why, and miles. At the end of each month, transfer the total to a spreadsheet.

Google Sheets and Microsoft Excel both have free mileage log templates you can find by searching “IRS mileage log template.” There are also free downloadable PDF versions if you prefer paper with a more structured format.

Option 3: Automatic Mileage Tracking Apps

This is the most hands-off method available. These apps run in the background on your phone, detect when you are driving, and log your trips automatically. You swipe to classify each drive as business or personal, and the app generates IRS-compliant reports at year’s end.

Top options:

Option 4: Receipt Capture Apps for Other Business Expenses

Mileage is not the only thing you should be tracking. If you buy gas, supplies, or anything else for your business, you need to keep those receipts, too, especially if you plan to use the actual expense method for your vehicle deduction.

If you paid cash or did not have your card with you, you still need to capture that expense. These apps let you photograph a physical receipt and log it digitally so nothing gets lost:

• Expensify: Snap a photo of any receipt, and the app reads and logs the details automatically. Free plan available. Visit expensify.com.
• Shoeboxed: Mail in your physical receipts, and they digitize them for you, or use the app to photograph them yourself. Designed specifically for small business owners. Visit shoeboxed.com.
• Wave: Free accounting software for small businesses that includes receipt scanning and expense tracking. Visit wave.com.
• Keeper: Built for freelancers and 1099 workers. Links to your bank account and flags potential deductions automatically. Includes receipt capture. Visit keepertax.com.

What the IRS Actually Requires You to Keep

Let’s be specific, because “the IRS requires a mileage log” means different things to different people. Here is exactly what your records need to show for each business trip:

• The date of the trip
• Your starting location (your home address or office address)
• Your destination (business name and address)
• The business purpose of the trip (what you went there to do)
• The number of miles driven

You also need to track your total miles driven for the year so you can calculate your business use percentage. Your odometer reading at the start and end of the tax year is the standard way to capture this. Most mileage apps do this automatically.

The IRS does not require you to submit your mileage log with your tax return. But if you are ever audited, you must be able to produce it. Digital records are fully acceptable. A PDF export from a mileage tracking app is considered valid documentation.

One important note: the IRS does not accept reconstructed mileage logs that you filled in after the fact without supporting documentation. If you forgot to log a trip at the time it happened, you generally cannot claim it. This is why starting a tracking system now matters.

Official IRS and Government Resources to Bookmark

Going straight to the source is always smart. Below are the specific IRS and SBA pages you need, with direct links to each one.

IRS Topic No. 510 (Business Use of Car): A plain-language overview of how the vehicle deduction works, which method to choose, and what records to keep. This is the best starting point if you are new to this deduction. irs.gov/taxtopics/tc510

IRS Publication 463 (Travel, Gift, and Car Expenses): The definitive IRS guide to vehicle deductions for self-employed people. It covers the standard mileage rate, the actual expense method, depreciation, and recordkeeping requirements in full. Chapter 4 covers vehicle-specific rules. irs.gov/publications/p463

IRS Publication 334 (Tax Guide for Small Business): A broader guide for sole proprietors covering what business expenses are deductible, how to file Schedule C, and what to expect at tax time. Confirmed: the 2026 standard mileage rate of 72.5 cents is documented in this publication. irs.gov/publications/p334

About Schedule C (Form 1040), Profit or Loss from Business: Schedule C is the form sole proprietors use to report business income and expenses, including vehicle costs. Line 9 is where car and truck expenses are entered. irs.gov/forms-pubs/about-schedule-c-form-1040

IRS Self-Employed Individuals Tax Center: A full hub of resources for business owners, freelancers, and 1099 workers. Covers estimated taxes, self-employment tax, deductions, and more. irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

SBA.gov: Pay Taxes (Small Business Guide): The U.S. Small Business Administration’s plain-language breakdown of what small business owners owe at the federal, state, and local levels and how business structure affects your tax obligations. sba.gov/business-guide/manage-your-business/pay-taxes

What If You Have Not Been Tracking?

First: do not panic. And do not let the fact that you missed months of tracking stop you from starting today.

The honest answer is that if you did not log a trip at the time, you generally cannot claim it. The IRS does not accept mileage estimates or logs filled in after the fact without supporting documentation to back them up.

But that only applies to trips already behind you. Every mile you drive from today forward is deductible if you log it properly. Pick a system from the options above and start it today. A full year of documented mileage is worth significantly more than nothing.

If you have business receipts from earlier in the year, gather those too. Your accountant can help you determine what is still claimable for the current tax year and how to handle partial records.

When to Bring in a Tax Professional

This article gives you the foundation. But there are situations where a tax professional is necessary, not optional.

• You have never filed a Schedule C before
• You are not sure whether you qualify as self-employed for IRS purposes
• Your vehicle is used more than 50 percent for business (different depreciation rules apply under Section 179)
• You have employees or operate as an S-corporation
• You have not been making estimated quarterly tax payments, and your income has changed significantly
• Your business had a major change this year, such as significantly more income, new deductible expenses, or a pivot in structure

SCORE is a free resource affiliated with the SBA that connects small business owners with retired business professionals and accountants for free mentoring and consultations. Find your local chapter at score.org.

The IRS also runs the Volunteer Income Tax Assistance (VITA) program, which provides free basic tax return preparation to people who generally earn $67,000 or less. VITA volunteers are IRS-certified, and the service is free. Important note: VITA sites handle straightforward returns. If your Schedule C involves losses, depreciation, or a home office deduction, you will likely need a CPA instead. Use the IRS VITA locator tool at that link to find a site near you.

A Simple Checklist to Get Started Today

You do not need to do everything at once. Here is the right order:

• Step 1: Download a mileage tracking app today. Stride is completely free and built for 1099 workers. MileIQ is the most widely used option. Turn it on before you get in the car again.
• Step 2: Note your current odometer reading and save it somewhere. You need your total miles for the year to calculate business use percentage.
• Step 3: Download a receipt capture app like Expensify or Wave if you are not already saving business receipts digitally. This covers expenses beyond mileage.
• Step 4: Bookmark IRS Topic No. 510 (linked above) and read it once. It is brief and will answer most of your basic questions directly.
• Step 5: Schedule a meeting with a CPA or a free SCORE mentor before your next tax filing. Bring your mileage log, any business receipts, and your questions.

Gas prices are not in your control. How you respond to them as a business owner is. You are already spending this money on every client visit, every supply run, every trip you take to keep your business moving. The question is whether you are getting any of it back.

The IRS built this deduction into the tax code because operating a business costs money. Fuel is one of those costs. You are not working a loophole. You are using the system the way it was designed to be used.

Start logging your miles. Save your receipts. Bookmark the IRS resources. And tell your accountant about every business trip you took this year.

At $6, $7, or even $7.50 a gallon, every mile counts. Make yours work.

Bacon Magazine covers business, culture, and entrepreneurship for Black women who are building something real. For more resources, visit thebaconmagazine.com.