Gig economy
Vehicle cost calculator
What a mile actually costs you. And whether the standard deduction covers it.
Driving for work costs more than gas: maintenance, insurance, and the car losing value with every mile. This adds them up into a real cost per mile, then compares it to the 76¢ standard mileage deduction, the comparison that decides whether the simple standard rate or the actual-expense method saves you more.
Rough loss in value; a car drops fast with miles.
Enter your vehicle costs and miles.
Worked example, 20,000 miles in an efficient car
A driver covers 20,000 business miles at 28 mpg with gas at $4, plus $2,000 maintenance, $1,800 insurance and $3,500 of depreciation:
| Measure | Amount |
|---|---|
| Fuel | $2,500 |
| Total yearly cost | $9,800 |
| Real cost per mile | 49.0¢ |
| Standard deduction those miles earn (76¢) | $15,200 |
Real cost is 49.0¢ a mile, but the standard deduction is worth 76¢. So the standard rate deducts $5,400 more than this car actually costs. That is the usual result for an efficient car: the standard mileage method both is simpler and deducts more, so tracking every gas receipt would lower the deduction here.
Questions
What goes into the cost of driving?
Fuel, maintenance and repairs, insurance, registration, and depreciation, the value the car loses. Depreciation is the biggest and least visible: a car used hard for gig work can lose thousands a year, which is why high-mileage drivers wear vehicles out faster than the odometer suggests.
When does the actual-expense method win?
When your real cost per mile is above the standard rate, typically an expensive vehicle, poor fuel economy, or heavy repair bills. Luxury cars, large trucks and older vehicles with big maintenance costs are the usual cases. For most economy cars, the standard rate is higher.
Is this cost the same as my tax deduction?
No. This is your real economic cost. Your deduction is either the standard mileage rate or your actual expenses times the business-use percentage, you pick the method. This calculator compares the two so you can pick the larger.
How do I estimate depreciation?
A rough approach: how much the car's resale value drops over the year. A newer car driven 20,000+ business miles can lose $3,000-$6,000 a year. If you claim actual expenses, tax depreciation follows its own IRS schedule; this figure is for the economic comparison, not the tax form.
Related tools
- Mileage deduction calculator the standard-rate deduction
- Gig income calculator cost per mile in your hourly pay
- Driver tax calculator the full tax picture
Cost estimate for comparison. Your actual tax deduction depends on the method you choose and your business-use percentage. Not tax advice.