Which is better for gig drivers: standard mileage or actual expenses?

Standard mileage ($0.725/mile Jan-Jun, $0.76/mile from July 1 in 2026) usually wins for high-mileage gig drivers because the rate is designed to be generous — it covers gas, depreciation, insurance, and maintenance with margin for most vehicles. Actual expenses sometimes wins for luxury vehicles, low-mileage drivers, or new electric vehicles where actual depreciation and operating costs exceed the standard rate. The math depends on your specific vehicle and annual miles.

Can I switch from standard mileage to actual expenses mid-year?

No — you pick one method per vehicle per tax year. If you used standard mileage in prior years, you can switch to actual expenses going forward but generally cannot switch back. If you used actual expenses in the first year you placed the vehicle in service, you are locked into actual expenses for that vehicle's entire life. Pick carefully in year one.

How do I know which method saves more money?

Run both calculations for one year. Standard mileage = the business miles you drive in each half of the year × that half's rate ($0.725 Jan-Jun, $0.76 from July 1). Actual expenses = total annual vehicle costs (gas + oil + maintenance + depreciation + insurance + registration) × business-use percentage. Whichever produces the larger deduction wins. Most full-time gig drivers find standard mileage produces a 10–30% larger deduction.

Are EVs better with actual expenses or standard mileage?

It depends on miles. High-mileage EV drivers (20,000+ business miles) usually still come out ahead with standard mileage (20,000 miles split evenly: 10,000 × $0.725 + 10,000 × $0.76 = $14,850) even though actual electricity costs are lower than gas. Low-mileage EV drivers (under 10,000 business miles) might do better with actual expenses if the EV is expensive to depreciate. Run both numbers.

What documentation do I need for actual expenses?

Every receipt: gas, oil changes, tire purchases, brake service, alignment, registration fees, insurance premiums, parking fees, tolls. Plus a mileage log to compute business-use percentage. The recordkeeping is significantly heavier than standard mileage, which is one reason most gig drivers stick with the simpler standard method.

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Mileage vs. Actual Expenses: Which Is Better for Gig Drivers?

The IRS lets you choose between two methods for deducting vehicle costs. Choosing the right one can save you hundreds or even thousands of dollars each year.

Standard Mileage Rate

72.5 cents Jan–Jun, 76 cents from July 1 (2026)

Simple to calculate
Covers gas, insurance, depreciation, maintenance
Only need to track miles driven
Example: 25,000 miles split evenly across 2026 = $18,562.50 deduction
Must use in first year to keep option open

Best for: most gig workers

Actual Expenses Method

Itemized costs

Gas, oil, tires, repairs, insurance, registration
Depreciation of vehicle
Must track every receipt
Calculate business-use percentage
More record-keeping required

Best for: newer/expensive vehicles with high payments

Which Should You Choose?

Most gig workers benefit more from the standard mileage rate. It is simpler, requires less record-keeping, and often produces a higher deduction than actual expenses. The actual expenses method may be better if you have a newer vehicle with high lease or loan payments and relatively low mileage.

Important: if you want to use the standard mileage rate, you must use it in the first year you use the vehicle for business. You can switch to actual expenses later, but not the other way around.

Track Both Methods Automatically

ShiftTracker tracks mileage and expenses so you can compare which method saves you more at tax time.

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