IRS Mileage Deduction for General Contractors

The IRS sets a standard mileage rate for business use each year, and as a self-employed general contractor or independent construction professional, you can deduct that rate for every mile driven for business purposes — including job site visits, client meetings, supplier runs, bidding drives, permit office trips, and subcontractor coordination. The rate applies to sole proprietors filing Schedule C and to single-member LLCs treated as sole proprietorships. Most general contractors qualify as self-employed rather than employees, which makes the full standard mileage deduction available on your federal return. Check the IRS website or consult your CPA each January for the current year's rate.

Yes. Travel from your home office or business address to any active job site is fully deductible at the current IRS standard mileage rate. This includes daily site checks, progress walkthroughs, subcontractor supervision visits, and final inspections before project handoff. When you're running multiple job sites in a single day — which is routine for contractors managing several active projects — every leg of the route counts as deductible business mileage. You're not required to return to your office between sites. Automatic GPS tracking captures each segment of a multi-stop drive, so no mileage is missed even on your busiest days.

Yes. Driving to a lumber yard, hardware store, plumbing supplier, equipment rental house, or any vendor to purchase or pick up materials for a project is considered ordinary and necessary business activity under IRS Publication 463, and it qualifies for the standard mileage deduction. Log each supplier run with a brief note: "drove to lumber yard and hardware store to pick up framing materials for active renovation." That level of specificity is sufficient for IRS purposes and protects your deduction in the event of an audit.

The average general contractor drives between 15,000 and 30,000 business miles per year, depending on the number of active projects, geographic spread of job sites, and frequency of supplier and client trips. Applied to the current IRS standard mileage rate, that range represents a substantial deduction — and at a 22% federal tax rate, the resulting tax savings can reach into the thousands annually, plus any applicable state deductions. Contractors managing multiple simultaneous projects across a wide service area tend to accumulate mileage at the higher end. Every mile you fail to track is a deduction you're giving back to the IRS unnecessarily.

Yes. Driving to measure a prospective job site, conduct a walkthrough for a potential client, or deliver a bid in person is considered ordinary and necessary business activity under IRS rules. Pre-contract drives are fully deductible because the IRS recognizes that winning work requires showing up before a contract is signed. Log each estimating drive with a specific note identifying the property address and purpose. This protects your deduction and demonstrates a clear business objective even when the project did not ultimately proceed.

Driving from your home to a permanent office or yard location that serves as your principal place of business is treated as a non-deductible commute under IRS rules. Personal errands run during business trips also do not qualify for the personal portion of the drive. However, if you maintain a qualifying home office under IRS rules — a space used regularly and exclusively for business — then travel from your home directly to a job site, client, or supplier is generally deductible from the moment you leave your driveway. Establishing a legitimate home office is one of the most impactful tax moves a self-employed contractor can make.

Yes — and this is non-negotiable. The IRS requires contemporaneous mileage records, meaning each trip must be logged at or near the time it occurs, not reconstructed later. Your log must include the date, starting and ending location, business purpose, and total miles for every trip. Without these records, your entire mileage deduction is at risk of disallowance during an audit, even when the underlying trips were completely legitimate. General contractors are particularly vulnerable here because large deductions spread across many project sites invite added scrutiny. Automatic GPS tracking eliminates this risk by capturing every drive the moment your vehicle starts moving. Each trip is timestamped and geo-verified, giving you an audit-proof log that fully satisfies IRS contemporaneous documentation standards.

Most general contractors benefit more from the standard mileage rate because it requires far less record-keeping and typically produces a larger deduction than tracking actual vehicle operating costs like fuel, insurance, registration, and depreciation. The actual expense method can occasionally yield a higher deduction for contractors who operate a newer, high-cost work vehicle with significant depreciation, but the administrative complexity is considerably greater.

There is one critical rule: you must choose the standard mileage method in the first year you place a vehicle in business service. Once you use the actual expense method for a vehicle, you generally cannot switch back to the standard mileage rate for that vehicle in future years. Consult your CPA in year one to choose the method that best fits your fleet and business situation.