Can I Use the Standard Mileage Rate for a Taxi?

Yes. Being a taxi does not stop you from using the IRS standard mileage rate. Publication 463 says: "You can elect to use the standard mileage rate if you used a car for hire (such as a taxi) unless the standard mileage rate is otherwise not allowed" (Pub 463 (2025)). The Schedule C instructions repeat it: you can use the standard rate "even if you used your vehicle for hire (such as a taxicab)" (Schedule C instructions, line 9). The real limits are the other rules: five or more cabs at once, the first-year choice, leased cars, and past depreciation.

This is general information, not tax advice.

The Pub 463 note

The taxi note comes right after Pub 463's list of cases where the standard rate is not allowed. So a cab, a green cab or an FHV is treated like any other business car. It is the list that decides. For 2026 the business rate is 72.5¢ a mile from January 1 to June 30 and 76¢ from July 1 to December 31 (IRS, checked 2026-10-12). Business tolls and parking are added on top.

The 5+ cars rule (medallion owners and minifleets)

Pub 463: "If you own or lease five or more cars that are used for business at the same time, you can't use the standard mileage rate for the business use of any car." You would deduct actual expenses for each car instead.

What counts is at the same time. Pub 463 says you are not using five or more cars at the same time "if you alternate using (use at different times) the cars for business." Its examples:

• Three cars and two vans that one person alternates between: standard rate allowed.
• Four trucks in use, two traded in during the year for newer ones: standard rate allowed for all six, because no more than four were in use at once.
• One car plus four vans all in use by the business: not allowed for any of them.

So an owner-driver with one medallion cab is not affected by this rule. An owner whose five or more cabs are all on the road under lease at the same time is in the fleet case.

The first-year choice

For a car you own, "you must choose to use it in the first year the car is available for use in your business." After that you can move between the standard rate and actual expenses. If you move to actual expenses before the car is fully depreciated, you must use straight-line depreciation for the rest of its life (Pub 463; Topic 510).

The choice runs one way. You can't use the standard rate for a car if you have already claimed MACRS depreciation, a Section 179 deduction, the special depreciation allowance, or any depreciation method other than straight line on it. Owners who wrote off a new hybrid cab quickly in its first year should know this before planning to switch later.

The leased car rule

For a car you lease, choosing the standard rate means you "must use it for the entire lease period." You also can't use the standard rate once you have claimed actual expenses for that leased car. This matters most for DOV and lease-to-own arrangements and for FHV rentals. See can I deduct my TLC car rental? for the rent side.

A fleet shift-lease driver doesn't own the cab and doesn't lease it the way Pub 463 describes. Pub 463 does not address shift leases, so ask a preparer how your costs (lease fee, gas, card surcharge) should be reported. NYS asks taxi drivers for their lease agreement and a driver pay report showing what the leasing agent took out of card payments either way (NYS Tax).

Find your case

Compare both methods with real numbers in standard mileage vs actual expenses. Tolls: can I deduct tolls and parking?. Past rates for amended returns: IRS mileage rate history. The 2026 split: IRS mileage rate 2026. Everything else for cab drivers: taxes for NYC taxi drivers and the taxes hub.