Your truck earns its keep twice. Once when it carries you and the material to the job, and once at tax time. How much it is worth the second time depends on which country you work in, how you kept your records, and a choice you may have made without knowing it in the first year you put the vehicle to work.
This page covers the two American methods, the Canadian rules that look similar and are not, and the log that both countries expect you to have.
The 2026 US rates changed in the middle of the year
If you take the standard mileage rate in the United States, 2026 is not one number. It is two.
The IRS set the rate at 72.5 cents a mile from January 1, up 2.5 cents from 2025. Fuel prices then climbed through the spring, and in July the IRS revised it. The standard mileage rates page now shows both halves of the year.
| Period in 2026 | Business rate per mile |
|---|---|
| January 1 to June 30 | 72.5 cents |
| July 1 to December 31 | 76 cents |
The change came in Announcement 2026-11, published July 13, 2026, which modified the notice that set the original rates. It applies to business driving on or after July 1, 2026.
For you, that means your 2026 mileage total has to be split at June 30. One year, one number, one rate is the mistake to avoid here. If your log is a notebook on the dash with dates in it, you already have what you need. If it is a guess written in February, this is the year it goes wrong.
Example: one owner, one truck, 2026
These are example numbers.
- January through June: 9,400 business miles at 72.5 cents is $6,815
- July through December: 8,100 business miles at 76 cents is $6,156
- Total mileage deduction: $12,971
- Business parking and tolls on top: $240
Parking fees and tolls for business driving are deductible on top of the standard rate, per Publication 463. Fuel, oil, repairs, insurance and depreciation are not, because the rate already stands in for them.
Standard rate or actual expenses
The other American method is actual expenses. You add up what the vehicle really cost for the year, fuel, oil, repairs, tires, insurance, registration, depreciation or lease payments, then deduct the business use share of that total.
Neither method wins every time. Run both for a year before you decide.
Carrying on with the example above, say the truck did 24,000 miles in total, 17,500 of them for business. That is a business share of about 73 percent. If everything the truck cost that year came to $14,800, actual expenses would give you 73 percent of $14,800, which is $10,804. The standard rate gave $12,971. For an older truck that is paid off and cheap to run, the standard rate usually wins. For a new truck with payments, insurance and a fuel habit, actual expenses often win.
What the first year locks in
This is the part people find out too late. Publication 463 and the IRS rate announcement set out the rules.
- A vehicle you own. You have to choose the standard mileage rate in the first year the vehicle is available for business use. Do that, and you can switch to actual expenses in a later year. Claim actual expenses in that first year instead, and the standard rate is closed for that vehicle for as long as you have it.
- A vehicle you lease. If you use the standard rate, you have to use it for the whole lease period, including renewals.
- Several vehicles at once. You cannot use the standard mileage rate if you run five or more vehicles at the same time, which the IRS treats as a fleet.
Switching from the standard rate to actual expenses later also changes how depreciation is figured for the rest of the vehicle’s life. That is a conversation with your accountant, not a decision to make in the truck.
What counts as a business mile
The rules are in Publication 463, and the short version is this.
Driving between your home and a regular work location is commuting, and commuting is not deductible. Driving from one business stop to another during the work day is business travel. Shop to supply house, supply house to job, job to the next job, all of that counts. A trip to a temporary work location can also count, and if your home is your principal place of business the picture changes again. Those two cases have conditions attached, so read the rules or ask your accountant rather than assuming.
Here is an ordinary Tuesday, marked up. These are example numbers.
| Leg | Miles | Counts? |
|---|---|---|
| Home to the shop | 11 | No, commuting |
| Shop to the first call | 8 | Yes |
| First call to the supply house | 6 | Yes |
| Supply house to the second call | 14 | Yes |
| Second call to a lunch stop and back | 4 | No |
| Second call to the last job of the day | 9 | Yes |
| Last job back to the shop | 12 | Yes |
| Shop to home | 11 | No, commuting |
That day drove 75 miles and 49 of them were business miles. Log the 49, and write down the other 26 too, because the total is what proves the business share if you ever move to actual expenses.
Canada does not have a per kilometre deduction for the self-employed
Here is where a lot of Canadian owners go wrong, usually because they read something written for employees.
The 2026 per kilometre figures everybody quotes are real. The Department of Finance set them in January: 73 cents a kilometre for the first 5,000 kilometres and 67 cents after that, and in the territories 77 cents and 71 cents.
Those are limits on a tax free allowance an employer pays an employee who uses their own vehicle for work. If you are a sole proprietor, there is no employer, so there is no allowance. You cannot put 73 cents a kilometre on your own return.
What you claim instead is the business share of what the vehicle actually cost. The CRA sets it out as a plain formula: business kilometres divided by total kilometres, times total expenses.
Example: a plumber in Ontario, 2026
These are example numbers.
| Item | Amount |
|---|---|
| Fuel | $4,850 |
| Insurance | $1,940 |
| Maintenance, repairs and tires | $2,120 |
| Licence and registration | $190 |
| Total vehicle costs | $9,100 |
The van did 32,000 kilometres, and the logbook shows 24,000 of them for business. That is a business share of 75 percent.
- 24,000 divided by 32,000, times $9,100, is $6,825
- Business parking for the year, $210, comes off in full
- The claim so far is $7,035
Business parking and supplementary business insurance are deductible in full rather than by the business share, which Chapter 3 of guide T4002 spells out. Capital cost allowance on the van, loan interest and lease payments are claimed separately, with limits.
The limits on a passenger vehicle
For 2026, the Department of Finance set these:
- Capital cost allowance ceiling of $39,000 before tax for a passenger vehicle
- $1,100 a month before tax as the deductible leasing cost on a new lease
- $350 a month as the maximum interest deduction on a new loan to buy a passenger vehicle
Zero emission passenger vehicles have their own ceiling of $61,000.
Why a work van is treated better than a family pickup
Those limits apply to a passenger vehicle. They do not apply to a motor vehicle, and the CRA decides which one you have using seats and use, not what is painted on the door. The type of vehicle table is worth reading line by line.
- A pickup with a bench and seating for one to three people counts as a motor vehicle if more than 50 percent of its use is carrying goods or equipment to earn income.
- A pickup with an extended cab, seating four to nine, has to hit 90 percent business use of that kind to get the same treatment.
- A van with one to three seats follows the more than 50 percent test. A van seating four to nine follows the 90 percent test.
So the crew cab that hauls the family on Sundays is usually a passenger vehicle, and the shelved out van with one row of seats usually is not. Lettering and shelving are good evidence of how the vehicle is used, but the test the CRA applies is seating and use.
The logbook, in both countries
The record is the deduction. Without it you are arguing from memory, and memory loses.
In Canada, the CRA wants each business trip logged with the date, the destination, the purpose and the kilometres, plus the odometer reading at the start and end of your fiscal period.
In the United States, Publication 463 asks for records that show the time, the place, the business purpose and the miles, written down at or near the time of the trip rather than reconstructed a year later.
The Canadian sample year, which saves real time
The CRA allows a shortcut once you have earned it. Keep a full logbook for one complete year to set a base year percentage. After that, a three month sample logbook can stand in for the full year, as long as the business use stays in the same range, within 10 percent of the base year.
The CRA’s own example: the base year came out at 49 percent business use for the year. In a later year, a sample from April to June showed 51 percent, against 46 percent for those same months in the base year. Divide 51 by 46, multiply by 49, and you get 54 percent, which the CRA would accept.
There is no equivalent shortcut in the United States. Keep the log all year.
Habits that make this painless
- Photograph the odometer on January 1, or on the first day of your fiscal year, and again at the end. Two photos settle the total kilometres or miles question forever.
- Log at the end of each day while the jobs are still in your head, or log per job as you close it out. Either beats a monthly catch up.
- Put fuel on a separate card. It makes the actual expenses method possible later, even if you are taking the standard rate now.
- Keep the receipts for the big items, tires, brakes, insurance and repairs, whichever method you use. You need them if you ever switch, and in Canada you need them every year.
- If 2026 is a US standard rate year, write your mileage totals down in two blocks, January to June and July to December, before you hand anything to your accountant.
Get the vehicle question right once
Most of this is a one time decision followed by a habit. Pick the method in the first year, set up the log, and keep it the same way all year. The difference between a good record and a guess is usually a few thousand dollars, and it is decided in the truck, not in April.
This is general information, not tax advice. Rates and limits on this page were checked on September 25, 2026 against the IRS and CRA pages listed below, and they change. Your own situation, your province or state, and how your business is set up all matter, so go through it with your accountant before you file.
