Standard mileage rate or actual expenses?

The leased-vehicle rule is stricter

Publication 463: "If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period." There is no switching mid-lease.

When you cannot use the standard mileage rate at all

Publication 463 lists disqualifying circumstances. You cannot use it if you:

• Operate five or more cars simultaneously (a fleet)
• Claimed depreciation by any method other than straight line
• Claimed MACRS depreciation on the car
• Claimed a Section 179 deduction on the car
• Claimed the special depreciation allowance on the car
• Claimed actual expenses after 1997 on a leased car

Several of these are things an accountant may have done in a prior year without your realising it had this consequence.

Which usually comes out ahead

There is no universal answer, but the shape is predictable. Standard mileage tends to favour high-mileage drivers in inexpensive, efficient, paid-off vehicles — you collect 76¢ a mile against genuinely low costs. Actual expenses tend to favour expensive vehicles driven fewer miles, where depreciation and insurance dominate and the per-mile rate does not keep up.

For most gig drivers — high miles, modest car — standard mileage is usually the larger deduction and is dramatically less work, since actual expenses requires retaining and categorising every vehicle receipt for the year plus a business-use percentage.

Either way you still need the mileage log

This surprises people: choosing actual expenses does not free you from tracking miles. You still need business-use percentage, and that comes from business miles over total miles. Actual expenses means keeping the log and every receipt. See log requirements.

Parking and tolls are deductible in addition to the standard mileage rate.