# NEMT Mileage Deduction Calculator (2027): IRS Rate vs Actual Costs

Canonical URL: https://nemtguide.com/tools/nemt-mileage-deduction-calculator/ · Updated 2026-09-30

This calculator compares the two IRS ways to deduct a NEMT van: business miles times the IRS standard mileage rate, or the business share of what the van actually cost, depreciation included. For 2026 the rate is 72.5 cents a mile through June 30 and 76 cents from July 1. With the example numbers, actual costs deduct $29,400, which is $2,670 more than the rate.

- Split 2026 business miles at July 1: 72.5 cents a mile before that date and 76 cents from it (Announcement 2026-11).
- The IRS rate stands in for fuel, repairs, insurance, registration, and depreciation. Parking, tolls, and a self-employed owner's loan interest count under either method.
- Five or more vehicles used for the business at the same time rules out the IRS rate for every one of them.
- The first year decides. Section 179, special depreciation, or MACRS on a van ends the IRS rate for that van for good.
- More miles favor the rate. In the example, actual costs win at 36,000 business miles and the rate wins at 48,000.

Use the calculator on the web page: https://nemtguide.com/tools/nemt-mileage-deduction-calculator/

## What the mileage deduction calculator does

The IRS gives you two ways to deduct a vehicle you use in your business. With the standard mileage rate, you multiply business miles by a set number of cents. With actual expenses, you add up what the vehicle really cost to run for the year, depreciation or lease payments included, and deduct the business share. IRS Publication 463 suggests working it out both ways when you qualify for both, to see which is larger.

This calculator does both sums side by side for one van and one tax year. It splits the year at July 1 because the 2026 business rate changed that day: 72.5 cents a mile for January 1 through June 30, and 76 cents from July 1. The rates are boxes, not fixed numbers, so the page works for 2025, 2027, or any year with one rate or two.

Use it at tax time for each van, and above all before the first return for a new van, when the choice matters most. The answer is an estimate. Which method a van may use depends on what was claimed for it in earlier years, so bring both numbers to your tax preparer. The line numbers on this page are from Schedule C, the form a sole owner files.

## How to use the calculator

1. Total the van's business miles from your mileage log: once for January 1 to June 30, once for July 1 to December 31.
2. Enter the IRS business rate for each half of the year. For 2026, that is 72.5 cents and 76 cents. In a year with one rate, such as 2025 at 70 cents, enter it in both boxes.
3. Enter business use: business miles ÷ every mile the van drove that year. A van that only runs trips is 100%.
4. Enter a year of fuel, shop bills, insurance, and registration for this van.
5. Enter a year of depreciation from your tax preparer, or a year of lease payments if you lease.
6. Enter the most vehicles your business has on the road at the same time.

The results change as you type. **Reset to example** puts the example numbers back, and **Show the formula** lists each step of the math. Run it once for each van.

## What each number means

| Box | What to enter | Where to find it |
|---|---|---|
| Business miles, January to June | Miles driven for the business from January 1 to June 30 | Your mileage log or trip sheets |
| IRS rate, January to June | The business rate for those months, in cents | The IRS standard mileage rates page |
| Business miles, July to December | Business miles from July 1 to December 31 | Your mileage log or trip sheets |
| IRS rate, July to December | The business rate for those months, in cents | The IRS standard mileage rates page |
| Business use | Business miles ÷ total miles, as a percent | Odometer readings at the start and end of the year, and your log |
| Fuel a year | Everything spent on fuel for this van | Fuel card statements or receipts |
| Repairs, tires, and oil a year | Shop bills for this van | Repair and tire invoices |
| Insurance a year | This van's share of your commercial auto premium | The premium bills or the policy's schedule of vehicles |
| Registration and licenses a year | Registration, license and permit fees, and garage rent | DMV and permit receipts, rent bills |
| Depreciation or lease payments a year | One year of depreciation, or one year of lease payments | Your preparer's depreciation schedule, or your lease |
| Vehicles in use at the same time | The most vehicles running for the business at once | Your dispatch schedule |

### Split the year at July 1

The rate that applies is the one in effect when the miles were driven. Announcement 2026-11, published July 13, 2026 in Internal Revenue Bulletin 2026-29, applies 76 cents to business driving on or after July 1, 2026, and keeps 72.5 cents for driving before that. The IRS tied the change to recent increases in the price of fuel. It has changed the rate mid-year before, on July 1, 2022 and July 1, 2011, so check the IRS rates page for the year you are figuring.

| Year | January 1 to June 30 | July 1 to December 31 |
|---|---|---|
| 2025 | 70 cents | 70 cents |
| 2026 | 72.5 cents | 76 cents |

The IRS announced the 2026 rate on December 29, 2025. For the 2027 tax year, enter the rate the IRS posts for 2027 in both boxes, unless it changes the rate partway through the year again.

### What counts as a business mile

Driving from one business stop to the next counts, whether or not a rider is on board. So the empty drive to a pickup, counted as [deadhead miles](https://nemtguide.com/glossary/deadhead-miles/), is still business driving for taxes.

The drive between your home and your regular place of work is commuting, and Publication 463 never allows it. Two cases matter to owners who take a van home. If an office in your home qualifies as your principal place of business, the drive from home to a pickup counts. If you have no office at home or anywhere else, the drive from home to your first stop in your metro area, and from your last stop home, is commuting.

### What goes in actual expenses

Publication 463 lists the actual car expenses: depreciation, lease payments, registration fees, licenses, insurance, repairs, gas, garage rent, tires, oil, tolls, and parking fees. The standard rate replaces most of them. If you use the rate for a year, you cannot also deduct that year's depreciation, lease payments, repairs, gas, oil, insurance, or registration.

A few costs count under either method, so the calculator leaves them out of both columns. Business parking and tolls are deductible on top of the rate. If you are self-employed, so is the business share of the interest on the van loan and of state and local personal property tax on the van. Add them after you pick a method; they do not change which one is larger.

A wheelchair conversion is part of the van's cost. Publication 463 treats the cost of a car, plus sales tax and improvements, as a capital expense you recover through depreciation, so a lift or ramp goes into the depreciation box, not into repairs. Under the IRS rate, the conversion earns no deduction of its own.

## A worked example

The calculator opens with example numbers. They show how the math works. They are not typical costs, so replace them with your own. The example van drives 3,000 business miles a month, all for the business, and its costs are $900 a month of fuel, $300 of repairs, $600 of insurance, and $150 of registration and other fees, plus $6,000 of depreciation for the year.

| Step | Math | Result |
|---|---|---|
| Deduction for January to June | 18,000 miles × 72.5 cents | $13,050 |
| Deduction for July to December | 18,000 miles × 76 cents | $13,680 |
| Deduction with the IRS rate | $13,050 + $13,680 | $26,730 |
| Actual expenses | $10,800 fuel + $3,600 repairs + $7,200 insurance + $1,800 registration + $6,000 depreciation | $29,400 |
| Deduction with actual expenses | $29,400 × 100% business use | $29,400 |
| Larger of the two deductions | Actual expenses | $29,400 |
| Difference between the two | $29,400 minus $26,730 | $2,670 |

A quick way to read the result is per mile. The example's actual costs come to $29,400 ÷ 36,000 miles, about 81.7 cents a business mile. The two 2026 rates average 74.25 cents when the miles split evenly. The rule holds for any van: when its actual cost per mile, all its costs ÷ all its miles, is above the average rate earned on its business miles, actual expenses deduct more.

The rate carries a cost you will see later. Notice 2026-10 treats 35 cents of each 2026 business mile as depreciation, and the July change left that figure in place. Had the example van used the rate, its basis would drop by 36,000 × 35 cents, or $12,600, more than the $6,000 of depreciation in the actual expenses column. A lower basis means a larger taxable gain when you sell the van. Once the basis reaches zero, Publication 463 says you keep deducting the full rate.

## What changes the answer most

Two numbers swing the result: depreciation, and miles. The first table keeps every other box at its example value.

| Depreciation or lease payments a year | Deduction with actual expenses | Deduction with the IRS rate | Larger |
|---|---|---|---|
| $0 | $23,400 | $26,730 | IRS rate, by $3,330 |
| $3,330 | $26,730 | $26,730 | Neither |
| $6,000 | $29,400 | $26,730 | Actual expenses, by $2,670 |
| $12,000 | $35,400 | $26,730 | Actual expenses, by $8,670 |
| $60,000 | $83,400 | $26,730 | Actual expenses, by $56,670 |

The last row is a $60,000 van written off in full in its first year. Publication 946 allows 100% special depreciation for qualified property acquired and placed in service after January 19, 2025, and a van needs more than 50% business use to take it. That write-off makes actual expenses far larger for one year and ends the IRS rate for that van from then on. Regular MACRS depreciation, with neither special depreciation nor section 179, spreads a van's cost over six tax years.

The second table changes the miles, split evenly across the year, and moves fuel with them at the example's 30 cents a mile. Everything else stays at the example.

| Business miles a year | Fuel a year | Deduction with actual expenses | Deduction with the IRS rate | Larger |
|---|---|---|---|---|
| 24,000 | $7,200 | $25,800 | $17,820 | Actual expenses, by $7,980 |
| 36,000 | $10,800 | $29,400 | $26,730 | Actual expenses, by $2,670 |
| 48,000 | $14,400 | $33,000 | $35,640 | IRS rate, by $2,640 |
| 60,000 | $18,000 | $36,600 | $44,550 | IRS rate, by $7,950 |

Every extra mile earns the full rate, while insurance, registration, and depreciation stay the same however far the van goes. That is why a busy van on low fixed costs tends to do better with the rate, and a costly converted van with fewer miles tends to do better with actual expenses.

## Who can use the IRS rate

Publication 463 counts a van as a car and lets you use the standard rate for a car used for hire, such as a taxi. The 2025 Schedule C instructions say the same, even for a vehicle used for hire. Three things rule it out.

- **Five or more vehicles at once.** If five or more cars or vans are used for the business at the same time, no vehicle can use the rate. Publication 463's example is a business whose employees drive four vans while the owner drives a car to customers: all five must use actual expenses. Vehicles used at different times do not count as used at the same time, and trading in vehicles during the year does not add to the count.
- **Fast depreciation on that vehicle.** A section 179 deduction, special depreciation, MACRS, or any method other than straight line over its useful life.
- **Actual expenses on a lease.** Once you deduct actual expenses for a leased vehicle, it cannot switch to the rate.

The calculator applies the first rule. At five or more vehicles, it shows the IRS rate as not reachable, explains why, and gives the actual expenses figure as your answer.

### Why the first year decides

| In the van's first year in your business | In later years |
|---|---|
| You own it and use the IRS rate | Either method each year. A switch to actual expenses means straight-line depreciation over the van's remaining useful life. |
| You own it and claim section 179, special depreciation, or MACRS | Actual expenses only, for as long as you keep it |
| You lease it and use the IRS rate | The IRS rate for the whole lease, renewals included |
| You lease it and deduct actual expenses | Actual expenses for the whole lease |

You choose the rate by the due date of your return, extensions included, and you cannot take the choice back. Run the calculator before you file the first return for a new van, then ask your preparer to look at the years ahead too, not only this one.

For depreciation, Publication 463 says a vehicle used directly in the business of carrying people for pay is not a car, and Publication 946 says it is not a passenger automobile. So the yearly depreciation limits in Publication 463 do not apply to it. It still needs more than 50% business use for special depreciation or section 179. The [NEMT business taxes guide](https://nemtguide.com/guides/nemt-business-taxes/) covers the depreciation rules in more depth.

## Records that back up either method

Publication 463 does not allow amounts you estimate. For each vehicle, keep the cost of the van and its improvements, the date you started using it for business, the miles for each business use, and the total miles for the year. Each use needs its date, destination, and business purpose.

- **Keep a log as you go.** A log kept weekly counts as a timely record, and Publication 463 names trip sheets as one kind of record. The [NEMT mileage log](https://nemtguide.com/templates/nemt-mileage-log/) has space for each shift and leg.
- **Record a run as one entry.** A route that starts and ends at your lot can be one record of miles, and a lunch stop between two pickups does not break it.
- **Keep the bills for actual expenses.** Fuel, repair, insurance, and registration receipts back up each number you enter in the calculator.
- **Keep them long enough.** Publication 463 says to keep records at least 3 years from the date you file the return. Publication 583 says to keep a van's purchase and depreciation records until the period of limitations runs out for the year you sell it.

## How to use the answer

- **Bring both numbers to your tax preparer.** Say which method the van used in its first year and whether any section 179 or special depreciation was taken on it.
- **Put it on the right lines.** On Schedule C, car and truck expenses go on line 9, depreciation on line 13, and lease payments on line 20a. The vehicle questions go in Part IV, or in Form 4562 Part V if you claim depreciation.
- **Plan your estimated tax.** A larger deduction lowers the profit your quarterly payments are based on. The [NEMT business taxes guide](https://nemtguide.com/guides/nemt-business-taxes/) lists the due dates.
- **Check the van's real cost.** The deduction is not what a mile costs you. The [cost per mile calculator](https://nemtguide.com/tools/nemt-cost-per-mile-calculator/) works that out, driver included.
- **Keep payer mileage separate.** What a broker or Medicaid pays per loaded mile is income, set by your contract or fee schedule, and has nothing to do with the IRS rate. The guide to [NEMT reimbursement rates](https://nemtguide.com/guides/nemt-reimbursement-rates/) shows where to find it. The [IRS mid-year rate increase](https://nemtguide.com/news/irs-mid-year-mileage-rate-increase/) explains what the 2026 change means for driver mileage pay.

## Frequently asked questions

### What is the IRS mileage rate for 2026?

For business driving, 72.5 cents a mile from January 1 through June 30, 2026, and 76 cents a mile from July 1 through December 31, 2026. The IRS raised it mid-year in Announcement 2026-11 (Internal Revenue Bulletin 2026-29, July 13, 2026), citing recent increases in the price of fuel. The rate follows the date of the driving, so split your log at July 1. The IRS says its rates apply to electric and hybrid vehicles as well as gas and diesel ones.

### Can a NEMT company use the standard mileage rate?

Yes, within limits. IRS Publication 463 counts a van as a car and lets you use the rate for a car used for hire, such as a taxi. The Schedule C instructions say the same. You cannot use it when five or more vehicles are used for the business at the same time, after claiming section 179, special depreciation, or MACRS on the vehicle, or after deducting actual expenses on a leased vehicle.

### Which method is better for a wheelchair van?

The one that deducts more over the years you keep the van. The rate pays the same cents a mile whatever the van cost, while actual expenses follow your bills. A costly converted van with high insurance and modest miles leans toward actual expenses. A van that drives many miles on low costs leans toward the rate. In this page's example, actual expenses win at 36,000 business miles and the rate wins at 48,000.

### Do the empty miles to a pickup count as business miles?

Yes, when they are business driving. The drive from one business stop to the next counts whether or not a rider is on board. The drive between your home and your regular place of work is commuting and never counts. If your home office is your principal place of business, the drive from home to a pickup counts. If you have no office at home or anywhere else, Publication 463 treats the drive from home to the first stop in your metro area, and from the last stop home, as commuting.

### Can I switch between the two methods later?

Sometimes. Choose the IRS rate in a van's first business year and you can pick either method in later years, but a switch to actual expenses means straight-line depreciation over the van's remaining useful life. Claim section 179, special depreciation, or MACRS in the first year and the rate is gone for that van. A leased van keeps the method you start with for the whole lease. You choose the rate by your return's due date, extensions included, and cannot take the choice back.

### What records do I need for a vehicle deduction?

For each vehicle, Publication 463 asks for its cost and improvements, the date you started using it for business, the miles for each business use, the total miles for the year, and the date, destination, and purpose of each use. A log kept weekly counts as timely, and trip sheets count as a record. Keep receipts too if you deduct actual expenses. Keep the records at least 3 years after you file, and the van's purchase records until the period of limitations runs out for the year you sell it.

### Does the standard mileage rate lower my van's basis?

Yes. Part of the rate counts as depreciation: 35 cents of each 2026 business mile and 33 cents of each 2025 mile (Notice 2026-10). The July 1 change left the 35 cents alone. Subtract that amount from the van's basis for every mile you deduct at the rate, which raises the taxable gain when you sell. Once the basis reaches zero, Publication 463 says you keep deducting the full rate.

### Where does the vehicle deduction go on my tax return?

On Schedule C, line 9 takes car and truck expenses: business miles times the rate plus business parking and tolls, or the business share of fuel, repairs, insurance, and registration. With actual expenses, depreciation goes on line 13 and lease payments on line 20a. Answer the vehicle questions in Schedule C Part IV, or in Form 4562 Part V if you claim depreciation (2025 Schedule C instructions).

## Official resources

- [IRS: Standard mileage rates by year](https://www.irs.gov/tax-professionals/standard-mileage-rates)
- [IRS: Topic no. 510, Business use of car](https://www.irs.gov/taxtopics/tc510)
- [IRS: Publication 463, Travel, Gift, and Car Expenses](https://www.irs.gov/publications/p463)
- [IRS: Publication 946, How To Depreciate Property](https://www.irs.gov/publications/p946)
- [IRS: About Schedule C (Form 1040), Profit or Loss From Business](https://www.irs.gov/forms-pubs/about-schedule-c-form-1040)
- [IRS: About Form 4562, Depreciation and Amortization](https://www.irs.gov/forms-pubs/about-form-4562)