TLC Driver Tax Deduction Estimator (Mileage vs Actual)

In short: If you drive a taxi or for-hire car as a self-employed driver, you can usually deduct your car costs one of two ways: the IRS standard mileage rate or your actual expenses times your business-use share. In 2026 the IRS rate is 72.5 cents a mile for January–June and 76 cents a mile for July–December, so this tool asks for your miles in each half. It adds tolls and parking (deductible on top of either method), compares the two methods and shows roughly what the difference is worth in self-employment tax. It is an estimate, not tax advice.

How to use it

1. Pick the tax year (2024, 2025 or 2026).
2. Enter your business miles. For 2026, enter January–June and July–December separately. These are the miles you drive for your driving business. Commuting is not a deductible expense (New York State's checklist for taxi and app drivers lists it as not deductible). If you are unsure which miles count, ask a tax preparer. Your mileage log is the record that counts.
3. Enter the total miles you drove the car all year. The tool uses it to work out your business-use share.
4. Enter your actual car costs for the year: fuel or charging, insurance, repairs, tires, registration and license fees, and lease payments or depreciation.
5. Enter tolls and parking you paid for work and were not paid back. If a passenger or the app reimbursed a toll, it is not your cost.
6. Optional: your income tax rate, to see a rough income-tax effect too.

How the numbers are worked out, with sources

• Standard method = business miles × the rate for that period, plus tolls and parking.
• Actual method = total actual costs × (business miles ÷ total miles), plus tolls and parking. That is how IRS Topic 510 describes it: gas, oil, repairs, tires, insurance, registration fees, licenses and depreciation or lease payments, for the business share of miles.
• Self-employment tax effect = the difference between the two methods × 92.35% × 15.3%. Self-employment tax is 15.3% (12.4% Social Security + 2.9% Medicare) on 92.35% of net self-employment earnings. This shortcut is only right while your earnings are below the Social Security wage base.
• Who may use the standard rate. IRS Publication 463 says you can elect it if you used a car for hire, such as a taxi, unless it is otherwise not allowed. It is not allowed if you use five or more cars at the same time, or after you claimed certain depreciation on the car. For a car you own, you must choose it in the first year the car is used for business.

Worked example

TLC's driver expense study (December 2024) found that the average full-time app driver logs 32,500 miles a year. Say all of them are business miles, split evenly across 2026:

Limits: what this tool can't tell you

• It does not calculate depreciation for you. Depreciation rules are complex; enter the figure your preparer gives you.
• It does not cover the federal "no tax on tips" deduction, NYC or NYS income tax, or the MCTMT. See no tax on tips for drivers and how much NYC income tax drivers pay.
• It does not tell you what to pay each quarter. Use quarterly estimated taxes for TLC drivers.
• Fines and summonses are not deductible car costs. New York State's checklist for taxi and app drivers lists "tickets or summons" among items that are not deductible.

The rate rules and history are in IRS mileage rate 2026 for drivers, the choice between methods in standard mileage vs actual expenses, and older rates in the IRS mileage rate history. For what your app trips should pay before costs, see FHV driver minimum pay.