Mississippi Mileage Deduction 2026: New 4% Flat Tax

Mississippi just reduced its flat income tax to 4%, down from 4.4%. At 15,000 business miles, you save roughly $435 in state taxes on top of about $4,056 in federal income and self-employment tax savings. That is about $4,491 back for keeping a mileage log. Mississippi also exempts the first $10,000 of taxable income from state tax entirely, which gives lower-income filers an even better effective rate.

Mississippi is on a legislated path to eliminate its income tax entirely by around 2030. After that date, revenue-trigger cuts continue until the rate reaches 0%. The tax you are paying today is scheduled to disappear, but until it does, every tracked mile still reduces your state bill at the current 4% rate.

How to File

Deduct your business miles on federal Schedule C, Line 9 at 72.5¢/mile. Mississippi starts with your federal adjusted gross income, so the mileage deduction flows through to your state return automatically. Keep a mileage log with the date, destination, purpose, and miles for each trip. If you expect to owe more than $200 in state taxes, make quarterly estimated payments.

The state does not require employers to reimburse mileage. If you drive for work, tracking is the only way to get the money back.

FAQ

Does Mississippi require mileage reimbursement?

No. Mississippi has no state law requiring private employers to reimburse mileage.

Does my mileage deduction reduce Mississippi state taxes?

Yes. Mississippi uses your federal adjusted gross income as the starting point. Your Schedule C mileage deduction reduces that number, which directly reduces your state tax.

Can W-2 employees deduct mileage in Mississippi?

No. The mileage deduction for W-2 employees was permanently eliminated under the One Big Beautiful Bill. If your employer does not reimburse, you have no tax remedy.

Track every business mile. Start free with TruMile →