Business mileage deductions for side hustlers: a practical guide
Business mileage deductions explained for side hustlers, with a worked example, a checklist and the mistakes to avoid.
Why this matters for side hustlers
A side hustle adds income on top of a salary, often at your highest marginal rate, so it pays to plan for the tax.
Worked example
Here is the calculation with sample figures. Change any number in the Mileage Deduction Calculator to run your own.
| Business miles | 8,000 |
| Rate per mile | $0.70 |
| Tax rate (%) | 22% |
| Deduction | $5,600.00 |
|---|---|
| Tax saved | $1,232.00 |
Business mileage deductions: how it works
Business miles can be deducted at a standard rate per mile instead of tracking every fuel and repair cost.
Commuting between home and a regular workplace usually does not count.
A second example with larger figures
Scaling the inputs up shows how the result moves. Percentages stay the same, so the tax grows in proportion to the amount it is applied to.
| Business miles | 8,000 |
| Rate per mile | $0.70 |
| Tax rate (%) | 22% |
| Deduction | $5,600.00 |
|---|---|
| Tax saved | $1,232.00 |
Using the calculator step by step
- Open the Mileage Deduction Calculator.
- Enter your own figures on each numbered line.
- Set the rate to the one that applies to you. Defaults are examples, not advice.
- Read the result and the formula below it.
Key terms
- Effective rate
- Total tax divided by total income, the average rate you actually pay.
- Net amount
- The amount before tax is added. On an invoice it is the figure the tax is calculated on.
- Exempt supply
- A sale that falls outside the tax entirely. No tax is charged and input tax usually cannot be reclaimed.
- Withholding
- Tax deducted at source, by an employer or payer, before the money reaches you.
- Reduced rate
- A lower rate that applies to specific categories, often essentials such as food, medicine or books.
A quick checklist for side hustlers
- Keep a dated mileage log.
- Separate business and personal trips.
- Apply the current rate.
Common mistakes to avoid
- Claiming commuting miles.
- Estimating miles at year-end without a log.
Run your own numbers. The Mileage Deduction Calculator updates as you type and shows the formula it uses.
Frequently asked questions
Why should side hustlers care about this?
A side hustle adds income on top of a salary, often at your highest marginal rate, so it pays to plan for the tax.
What is the quickest way to calculate it?
Use the Mileage Deduction Calculator: enter your figures and it shows the result and the formula.
Is this tax advice?
No. It is general information for planning. Rules differ by country and change over time, so confirm with your tax authority or a qualified adviser.
This article is general information for planning, not tax advice. Rates and rules change; confirm with your tax authority or a qualified adviser.