The Mileage Deduction Most Resellers Undercount

Ask a reseller what their biggest deduction is and most will say cost of goods. Fair enough. Ask what their second biggest is and you'll usually get a shrug, or something about shipping supplies.

For a lot of people it's mileage, and they're leaving most of it on the table. Not because they don't know it's deductible, but because reconstructing a year of driving in April is miserable, so they either skip it or guess a round number that won't survive a second look.

Here's the thing that makes 2026 worth paying attention to: the rate changed halfway through the year, and a single round number applied to the whole year is now wrong by construction.

The 2026 rates, and why the split matters

The IRS standard mileage rate for business use in 2026 isn't one number. It's two.

This has happened before (2022 had a mid-year bump too), and it trips people up every time. If you drove 3,100 business miles this year and apply the first-half rate to all of them, you understate your deduction by about $56. Apply the second-half rate to all of them and you overstate it by roughly $52. Neither is catastrophic on its own, but one of them is wrong in the direction the IRS cares about, and both signal that your log isn't real.

Splitting correctly requires knowing not just how far you drove, but when. That's the part a reconstructed log can't give you.

What actually counts as a business mile

More than most people claim. The general test is whether the trip's purpose was your business, and for a reselling operation that covers a lot of ground:

1. Sourcing runs. Thrift stores, estate sales, garage sales, auctions, flea markets, storage unit auctions, liquidation pickups. Every leg of the route counts, not just the stop where you actually bought something. A four store loop where you struck out at three is still four stores of business driving.
2. Post office and carrier drop-offs. Small trips, but they add up faster than anything else on this list because they repeat.
3. Supply runs. Boxes, poly mailers, label rolls, shelving.
4. Booth trips. Restocking, rearranging, paying rent, picking up unsold items.
5. Buyer meetups for local pickup sales.
6. Business banking and post office box trips, if the purpose is genuinely the business.

What doesn't count is the ordinary commute between home and a fixed regular workplace. For most resellers working out of a home office that's moot, since the home office is the starting point and the first business stop is already a business mile. If you rent separate warehouse space and drive there daily, talk to your tax preparer, because that fact pattern gets more complicated than a blog post should pretend.

Photo by Luke Miller on Pexels

Why "contemporaneous" is the word that matters

The IRS expects a mileage log that's kept at or near the time of the driving. That's what contemporaneous means, and it's the single most common weak point in a reseller's records.

A log written in April from memory and credit card statements is a reconstruction. It might be honest and roughly accurate, and it might still fall apart under questioning, because you can't reliably answer follow-up questions from it. What date was that trip? What was the business purpose? Where did you start and end? How many miles exactly?

A genuine log answers all four without effort, and it answers them the same way twice.

The practical bar is lower than people fear. You don't need GPS traces or notarized anything. For each business trip you want the date, the starting and ending point (a place name is fine, "home to Goodwill on Route 9 and back" is fine), the business purpose, and the mileage. Four fields. The difficulty isn't the format, it's the discipline of capturing them 200 times a year while you're busy running a business.

A worked example

Take a moderately active part-time reseller:

• Sourcing twice a week, averaging a 25 mile round trip: 50 miles/week
• Post office twice a week, 6 mile round trip: 12 miles/week
• Call it 50 working weeks: 3,100 miles/year

Split roughly evenly across the rate change, say 1,500 miles in the first half and 1,600 in the second:

That's $2,303.50 of deduction from driving you were already doing. At a combined federal and self-employment rate in the mid twenties, that's real money back, and it costs nothing extra because the gas and the wear were already spent.

Now consider what happens if you don't track it. Most people who guess land somewhere around "maybe 1,500 miles?" because the small repeated trips are invisible in memory. The sourcing runs feel memorable. The twice weekly six mile post office hop doesn't, and that's 600 miles a year, worth roughly $440 on its own.

The small trips are where the money is, and they're exactly the ones you'll never reconstruct.

The trip that's half personal

The question I get most often is about mixed trips, and the answer is more generous than people expect.

If you drive to an estate sale and stop for groceries on the way home, the estate sale leg is business. The detour to the grocery store is personal. You don't lose the whole trip because part of it was personal, you just don't get to count the personal part.

The test is primary purpose. A trip you would have taken anyway for personal reasons doesn't become deductible because you happened to stop at a thrift store. A trip you took to source, which picked up a personal errand along the way, stays a business trip for the business portion.

Where people get this wrong in both directions:

• Too conservative: skipping a sourcing run because they also grabbed lunch. The lunch stop doesn't contaminate the trip.
• Too aggressive: counting the weekly family Target run as business because they glanced at the clearance endcap. Primary purpose was groceries.

Write the purpose down at the time and the ambiguity mostly disappears. "Estate sale on Oakwood, then home" is a record. "Errands" is not.

Standard mileage or actual expenses?

You get to choose, and for most resellers it isn't close.

Two things worth knowing. If you want the option to use standard mileage on a vehicle at all, you generally have to choose it the first year you use that vehicle for business. And either way, you need the mileage log, because actual expenses still require knowing your business use percentage, which is business miles divided by total miles.

So there's no version of this where tracking your miles is optional. There's only a version where you do it as you go, and a version where you do it badly in April.

Capturing it without thinking about it

The honest answer is that manual logging fails for most people. Not because it's hard, but because it competes with everything else for attention at exactly the moment you're loading a trunk full of inventory.

Automatic detection solves the capture problem, and it's worth understanding how a well built one should handle your location, because this is your movement history we're talking about.

In Flippd, a tracked trip stays on the phone that recorded it. The GPS trace never reaches our servers, which is deliberate, and it means nobody can hand over a map of where you've been because nobody has one. A trip only becomes a record on your account once you classify it as business, and even then what's saved is the date, the distance, and stops by name, not the route you drove. Personal trips stay personal, and they age off the device on their own.

That design has one consequence worth knowing up front: those unclassified trips live on the device and nowhere else, so classify the ones that matter rather than letting them sit.

Whatever you use, the test is the same. At tax time, can you produce a list with dates, purposes, and mileage that you'd be comfortable handing to a preparer without apologizing for it? If yes, you're fine. If you find yourself explaining your methodology, you're reconstructing.

Run your own numbers

The deduction only matters in the context of what you actually made. If you haven't put your year end numbers together, our income calculator and profit calculator are free and will get you a realistic picture of net profit after fees, shipping, and expenses.

Mileage is one line on that picture, but for a sourcing heavy seller it's frequently the difference between a year that looks marginal and a year that looks worth doing.

Key Takeaways

• The 2026 IRS business rate is $0.725 per mile through June 30 and $0.760 from July 1, so one blended number for the whole year is wrong either way.
• Sourcing runs count even when you buy nothing, and every leg of a multi stop route counts.
• The small repeated trips (post office, supply runs) are usually the largest missed chunk, and the least reconstructable.
• "Contemporaneous" means kept as you go. An April reconstruction is the weakest part of most resellers' records.
• You need a mileage log either way, because actual expenses requires a business use percentage.
• A reseller driving 3,100 business miles in 2026 is looking at roughly $2,300 in deduction.

One caveat that applies to all of this: I'm a reseller and a builder, not your accountant. The rates and the record keeping standard are matters of public record, but how they apply to your situation is a conversation to have with someone who knows your return.

Start where you are

If it's September and you haven't logged a mile, you haven't lost the year. Turn on tracking now and you'll capture the fourth quarter properly, which is the heaviest sourcing and shipping stretch most resellers have. Then reconstruct what you reasonably can for January through August, clearly labeled as an estimate, and talk to your preparer about it.

Next year you'll have twelve clean months. That's how everyone who has a good log got one.

Ready to stop guessing at your mileage deduction? Flippd helps resellers log purchases, track inventory, and calculate true profit after all fees and expenses, right from your phone. iPhone, iPad, Android, Mac, Apple Watch, and Web.

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