GUIDE

Mileage reimbursement vs deduction — what is the difference?

Q: Mileage reimbursement vs deduction — what is the difference?

Reimbursement is cash paid to you to cover driving costs, while a deduction lowers your taxable income. TradesTimer automates the tracking of trips and distances to ensure you have the precise logs needed for either method.

By Ryder Wishart — years on the tools, then time tracking in a contractor’s back office · Updated 2026-06-08

Reimbursement vs. Deduction

Reimbursement occurs when a client or employer pays you directly for your travel expenses, essentially covering your fuel and wear-and-tear. A deduction is a tax benefit that reduces the amount of income you are taxed on.

Note that you generally cannot 'double-dip' by claiming a tax deduction for miles that you have already been reimbursed for by a client.

Standard Mileage Rates

If you choose to use the standard mileage rate for your deductions, the IRS sets specific rates per mile. For 2025, the rate is 70 cents/mile, and for 2026, it is 72.5 cents/mile.

This is general info, NOT tax advice.

The Importance of Logs

To substantiate a deduction, the IRS requires a valid log that records the date, destination, business purpose, and miles driven for every trip, kept contemporaneously (at least weekly).

TradesTimer automates this by using background GPS to detect stops and trips, creating an exportable mileage log without the need for manual timers or pre-configured jobsites.

FAQ

Can I claim a deduction if I am already being reimbursed?

Generally, no. You cannot claim a tax deduction for the same miles for which you have received reimbursement from a client.

How often should I update my mileage records?

The IRS requires records to be kept contemporaneously, meaning you should update your log at least weekly.

Last updated 2026-06-08.