Quick Answer
The standard mileage rate is better for most freelancers driving 10,000+ business miles annually. At 67 cents per mile, that's $6,700 in deductions versus typical actual expenses of $4,000-$5,500. However, expensive vehicles or high repair costs may favor actual expenses.
Best Answer
Alex Torres, Gig Economy Tax Educator
Best for drivers putting 20,000+ miles on their vehicle annually through Uber, DoorDash, or similar platforms
Which method saves more money?
For most rideshare and delivery drivers, the standard mileage rate wins by a landslide. At 67 cents per mile for 2024, drivers logging serious miles come out way ahead.
Here's the math: If you drive 25,000 business miles (typical for full-time rideshare), that's $16,750 in deductions using the standard rate. Your actual vehicle costs — gas, maintenance, insurance, depreciation — rarely exceed $12,000-$13,000 annually unless you're driving a luxury vehicle.
Example: Full-time Uber driver comparison
Meet Sarah, who drives for Uber 40 hours/week and logs 28,000 business miles annually:
Standard mileage method:
Actual expense method:
Sarah saves an extra $4,360 in deductions using standard mileage — worth roughly $1,300 in tax savings at a 30% combined rate.
When actual expenses might win
Actual expenses only make sense for drivers with:
Comparison: Standard rate vs actual expenses by mileage
*Actual expenses assume mid-range vehicle with 80% business use*
Key rules to remember
What you should do
1. Start with standard mileage unless you drive an expensive vehicle or have unusual circumstances
2. Keep detailed mileage logs using apps like MileIQ, Everlance, or our expense tracker
3. Calculate both methods at year-end to see which saves more (you can switch to actual expenses if better)
4. Save all vehicle receipts in case you switch to actual expenses
Key takeaway: Standard mileage wins for 80% of rideshare/delivery drivers. At 67 cents per mile, drivers logging 15,000+ business miles typically save $2,000-$5,000 more in deductions than actual expenses.
*Sources: [IRS Publication 463](https://www.irs.gov/pub/irs-pdf/p463.pdf), [IRS Revenue Procedure 2024-8](https://www.irs.gov/pub/irs-irbs/irb24-02.pdf)*
Key Takeaway: Standard mileage rate wins for most high-mileage drivers, providing $2,000-$5,000 more in deductions than actual expenses at 15,000+ annual business miles.
Standard mileage vs actual expenses by annual business miles
| Annual Business Miles | Standard Mileage Deduction | Typical Actual Expenses | Better Choice |
|---|---|---|---|
| 5,000 | $3,350 | $2,800-$3,500 | Depends on vehicle |
| 10,000 | $6,700 | $4,500-$6,000 | Standard mileage |
| 15,000 | $10,050 | $6,500-$8,500 | Standard mileage |
| 20,000 | $13,400 | $8,500-$11,000 | Standard mileage |
| 25,000+ | $16,750+ | $10,000-$13,500 | Standard mileage |
More Perspectives
Priya Sharma, Small Business Tax Analyst
Best for freelancers who use their vehicle moderately for client meetings, travel, and business errands
The calculation is more nuanced for moderate-mileage freelancers
As a consultant or freelancer driving 8,000-15,000 business miles annually, the choice isn't as clear-cut as it is for rideshare drivers. You need to run both calculations.
Example: Marketing consultant comparison
John drives 12,000 business miles yearly visiting clients in his 2022 Honda Accord:
Standard mileage:** 12,000 × $0.67 = **$8,040
Actual expenses (60% business use):
Standard mileage wins by $2,520.
When to consider actual expenses
Actual expenses might work better if you:
Strategic considerations
Year one decision matters: Once you choose standard mileage for a vehicle, you can switch to actual expenses later, but never back to standard mileage.
Keep dual records: Track both mileage and expenses your first year to see which method works better for your situation.
Key takeaway: Most moderate-mileage freelancers benefit from standard mileage, but the gap is smaller than for high-mileage drivers — typically $1,000-$3,000 difference annually.
Key Takeaway: Most moderate-mileage freelancers benefit from standard mileage, but the gap is smaller — typically $1,000-$3,000 difference annually.
Alex Torres, Gig Economy Tax Educator
Best for people with day jobs who freelance part-time and drive limited business miles
Lower mileage = closer decision
Side hustlers typically drive 3,000-8,000 business miles per year, making the choice more dependent on your specific vehicle costs.
Example: Weekend freelance photographer
Maria drives to wedding venues on weekends, logging 6,000 business miles in her 2020 Subaru Outback:
Standard mileage:** 6,000 × $0.67 = **$4,020
Actual expenses (25% business use):
Standard mileage wins by just $645 — much closer than high-mileage scenarios.
The simplicity factor
For side hustlers, standard mileage offers huge administrative advantages:
When actual expenses might win
Key takeaway: Side hustlers should default to standard mileage for simplicity unless driving a very expensive vehicle or having unusually high repair costs.
Key Takeaway: Side hustlers should default to standard mileage for simplicity, even though the dollar difference is often smaller at low mileage levels.
Sources
- IRS Publication 463 — Travel, Gift, and Car Expenses
- IRS Revenue Procedure 2024-8 — 2024 Standard mileage rates
Related Questions
Reviewed by Priya Sharma, Small Business Tax Analyst on February 28, 2024
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.