How Do You Claim Gas Mileage on Your Tax Return?

Deduct your gas expenses and lower your taxes. Read our detailed step-by-step guide on how to claim gas deductions.

tax on mileage

If you are a small business owner or a self-employed individual, you probably hunt for every possible tax deduction when tax season comes around. 

From Instagram advertising fees to office supplies, most business expenses are tax-deductible. And if driving is a necessary part of your job, you should be able to deduct your driving expenses on your federal income tax return, including what you pay for gas!

In this blog, we’ll help you understand whether you’re eligible for the gas deduction and how you can claim it on your tax return. 

Let’s dive right in. 

What is the mileage tax deduction?

Gas is a small part of a bigger deduction category—that is, mileage. 

Mileage tax deduction refers to what you can claim from using your vehicles for business-related purposes on your tax return. So, for example, if you’re a self-employed taxi driver, all miles you drive for work are deductible, no matter how many. However, if you also use that car to take your family out for a summer trip, you must exclude those miles when filing tax deductions. 

So, the golden rule here is that only work-related mileage can be written off. That being said, there are also other conditions you need to meet to qualify for the mileage tax deduction, depending on which deduction method you opt for. 

Read more: How You Can Benefit From Mileage Tax Deductions.

Mileage tax deduction methods 

There are two approaches to writing off your mileage: the standard and the actual expense method.

We’ll give you a quick overview of both methods below.

1. The standard mileage method 

This method is very simple to follow. The IRS only requires you to maintain a log of qualifying driven mileage, which means you must have a mileage tracker to record date, destination, business purpose, starting and ending odometer readings, and total mileage for each business trip. You can use Shoeboxed’s mileage tracker for free for this purpose!

The deduction rate of the standard mileage method for this current year is 58.5 cents per mile. So if you have 5,000 driven miles for business purposes, you end up with a write-off of $2,800. 

You won’t be able to deduct gas expenses with this method because the IRS already included gas in the standard rate (58.5 cents).

Update June 2022: “For the final 6 months of 2022, the standard mileage rate for business travel will be 62.5 cents per mile, up 4 cents from the rate effective at the start of the year.” (IRS

2. The actual expense method 

With this method, you must keep records of your vehicle’s expenses, including gas, oil, repairs, tires, insurance, registration fees, licenses, etc.

Once you get the total expense, multiply that sum by your business-use percentage.

For instance, in 2021, you drove 20,000 miles in a year, with 5,000 of those being business miles. That means your business-use percentage for your car would be 25%.

Step-by-step guide on how to claim gas mileage on your tax return 

So, you can only write off your gas cost with the actual expense method. Let’s find out how you can claim it on your taxes. 

Step 1: Keep your receipts. 

You do not have to keep track of or log your mileage if you pick the actual expense deduction. However, the IRS requires you save copies of any necessary receipts and relevant documentation. In this case, that means your gas receipts.  

If you fail to store your receipts properly, you will need to:

  • Provide your own written or oral statement containing specific information.
  • Submit other supporting evidence, such as written statements or oral testimony from a third party.

Obviously, it’s quite a hassle if you don’t have receipts, so don’t let that happen. Shoeboxed can help you with that! Shoeboxed is a receipt organizer app that can help you digitize and categorize your receipts securely in the cloud. It will take your headaches and worries of losing receipts or damaging them and give you back peace of mind. 

Find more about Shoeboxed at the end of the article!

Step 2: Calculate your total deduction.

Once you have all receipts available at hand, it will be very easy to figure out what you have spent on gas throughout the year. Then, add your gas expenses with other costs needed to operate your vehicle.

Lastly, multiply that grand total by your business-use percentage (if any), which we explained earlier in section 2.  

Following those steps will give the number you need in step 3. 

Step 3: Claim your gas deduction on your tax return. 

There’s no separate part for each deduction method—whether you take the standard deduction or actual expense method, you will enter your calculated total deductions on line 9 of Schedule C (Form 1040)

Source: The IRS 

With the actual expense method, you can also fill in your deductible depreciation amount on line 13 and rent or lease payments on line 20a.

Step 4: Retain your receipts and documents. 

You must retain your gas receipts and other relevant documents at least three years from the date you file your tax return. Again, you don’t want to waste a lot of time and space organizing and storing a bunch of receipt papers. That’s why you should consider using apps like Shoeboxed to easily get this done. 

The bottom line 

Though the actual vehicle’s expense method is more complicated to apply, it can sometimes help you save much more money on taxes than the standard deduction method, particularly considering gas price volatility. 

About Shoeboxed

Shoeboxed supports multiple methods for receipt capture: send, scan, upload, forward, and more!

You can stuff your receipts into one of our Magic Envelopes (prepaid postage in the US). Use our Shoeboxed app to snap a picture while on the go. Auto-import receipts from Gmail. Or forward a receipt to your designated Shoeboxed email account.

Turn your receipts into data and deductibles with our expense reports that include IRS-accepted receipt images.

Join over 1 million businesses scanning & organizing receipts, creating expense reports and more—with Shoeboxed.

Try Shoeboxed for FREE today!

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