Tennessee Mileage Deduction 2026

Tennessee has no state income tax. Your mileage deduction is federal-only, and there is no state return to file. At 15,000 business miles, you save about $4,056 in federal income and self-employment tax savings just by keeping a mileage log.

There is no income tax on individuals, but entity choice matters enormously here. If you form an LLC, even a single-member LLC, you trigger Tennessee's Franchise and Excise Tax: 6.5% on net income plus 0.25% on net worth. Sole proprietors are exempt from this tax entirely. Forming an LLC for liability protection may create a state tax bill that sole proprietors simply do not pay.

How to File

Deduct your business miles on federal Schedule C, Line 9 at 72.5¢/mile. No state return is required. Keep a log with the date, destination, purpose, and miles for each trip.

Tennessee does not require employers to reimburse mileage.

FAQ

Do I still need to track mileage if Tennessee has no income tax?

Yes. The deduction is on your federal return, which applies regardless of state taxes. Skipping the log means leaving $4,000+ on the table.

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