South Carolina Mileage Deduction 2026

South Carolina's top income tax rate was recently reduced to 6%, down from 6.2%. At 15,000 business miles and a 5.5% effective rate, you save roughly $598 in state taxes on top of about $4,056 in federal income and self-employment tax savings. That is about $4,654 back for keeping a mileage log. South Carolina has no local income taxes, so you are looking at one state rate and one federal rate, that is it.

Self-employed sole proprietors and single-member LLC owners in South Carolina can elect a flat 3% rate on active business income instead of the graduated rate that tops out at 6%. The election is made annually, so you can evaluate each year whether the flat rate saves you money. For most self-employed filers with meaningful net income, this is a significant break worth running the numbers on.

How to File

Deduct your business miles on federal Schedule C, Line 9 at 72.5¢/mile. South Carolina 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 $100 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 South Carolina require mileage reimbursement?

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

Does my mileage deduction reduce South Carolina state taxes?

Yes. South Carolina 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 South Carolina?

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.

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