Christmas Light Side Hustle: Mileage and Taxes

You've got a truck, a tall ladder and a neighbor who asked last year who did your roofline. So this November you're putting up Christmas lights for money: a few estimates after work, a run to the supplier for clips and wire, twenty installs before mid-December, then the takedowns in January. Before the first bid, you want to know which of those drives you can write off, and what happens when one job starts in 2026 and ends in 2027.

Which drives count

IRS Publication 463 allows the cost of getting "from one workplace to the other" when you work at two places in a day. A lighting business is almost all of that kind of driving:

• Estimates. Measuring a roofline and pricing a job is business, even when the customer says no.
• Supply runs. The hardware store or a wholesale lighting supplier for clips, wire, timers and replacement bulbs, when it's part of a workday.
• Installs, service calls and takedowns. Every trip to a customer's house, including the one in December when half a strand goes dark.
• Storage. Trips to a storage unit where you keep your reels and ladders between jobs.

The question every service business runs into is the first drive of the day. If you have no regular work location and your customers are in your metro area, Pub. 463 calls home to a temporary work site and back "nondeductible commuting expenses." Those legs become business miles if your home is your principal place of business, which generally means a space used only and regularly for things like quoting, billing and ordering, with no other fixed office. Our home office and commuting guide walks through that test, and the pet sitter guide shows the same rule with a worked week.

One season, two tax years

This is the part that's specific to lights. Your season crosses December 31, and the IRS treats the two halves separately.

• Miles go in the year you drive them. The IRS standard mileage rate for business use is 72.5¢ for January 1 to June 30, 2026 and 76¢ for July 1 to December 31, 2026. No 2027 rate is posted yet; the IRS usually announces the next year's rate in December. Your January takedowns are 2027 miles at that rate, and they go on next year's return.
• Income goes in the year you receive it. Most side businesses use the cash method. Publication 538 says that under it you include "all items of income you actually or constructively receive during the tax year." A 50% deposit in November and the balance at install are both 2026 income, even though you still owe the customer a January takedown. If you bill the balance at takedown instead, that payment is 2027 income.
• Expenses go in the year you pay them. Under the same method you deduct expenses "in the tax year in which you actually pay them." Clips you buy in December are a 2026 expense even if you use some in January.

What a first season looks like: a worked example

Marcus quotes jobs, invoices and orders from a spare-room desk he uses for nothing else, so his home is his principal place of business and the trips from home count. His first season:

If his desk didn't qualify, the home legs of those trips would be commuting and only the drives between houses and suppliers would count, which in a season like this can be well under half the total. That's the question worth settling before the first estimate, not in April. The mileage calculator will run your own numbers.

The lights, ladders and everything else

On the standard mileage rate, the 76¢ already covers the truck's gas, insurance, repairs and depreciation, so you don't deduct those separately. You still deduct parking and tolls (see parking and tolls on the standard rate), and everything that isn't the vehicle:

• Lights the customer keeps. If you sell the lights as part of the job, what you charge is income and what you paid for them is a cost of that job. Some states charge sales tax on the materials part of the bill; check with your state's revenue department before you set prices.
• Lights you own and rent out. Reels you put up on a customer's house and take back every January are your equipment. The IRS tangible property rules let you elect the de minimis safe harbor and deduct amounts "up to $2,500 per invoice or item (as substantiated by invoice)" in the year you pay. The election is a statement attached to your timely filed return, made each year. Bigger purchases can be depreciated, or a preparer can tell you about the other expensing options.
• Ladders, poles and tools. Equipment, usually covered by the same election. Clips, zip ties and timers are supplies.
• Insurance. General liability for ladder work on other people's roofs is a business expense.
• Storage, marketing and phone. A storage unit for the off-season, yard signs, ads, and the business share of your phone.

One vehicle rule to know before November: if you want the standard mileage rate for this truck, you generally have to use it in the first year the truck is used for business. If you've already claimed actual expenses on it for another business, you can't switch it now. Our standard mileage vs. actual expenses guide covers the first-year rule.

Set some of it aside before January 15

A lighting season can be a lot of profit packed into eight weeks. Self-employment tax applies once your net earnings reach $400 (IRS self-employment tax page), on top of income tax. The estimated payment that covers September through December 2026 is due January 15, 2027, right in the middle of your takedowns. If you also have a W-2 job, raising your withholding on the paychecks you have left in 2026 can cover it instead (see extra W-4 withholding for a side gig), and how much to set aside has the percentages.

If a friend helps on install days and you pay them, their pay is a business expense too, and you may need to send them a Form 1099-NEC. The reporting threshold changed for payments made in 2026, so check the current IRS instructions for that form before January.

What the log needs to show

For each business drive: date, miles, where and why. "Estimate, 2-story colonial" or "Takedown, Oak St." is enough; you don't need customers' full names. Log it the same day: twenty houses' worth of installs, fixes and takedowns spread over three months is hard to rebuild from text messages later, and same-day notes hold up better than April reconstruction.

Who this isn't for

• Employees of a lighting or landscaping company. If you're paid on a W-2, unreimbursed car costs aren't deductible on your federal return. Ask the company about mileage reimbursement.
• People decorating their own house, or helping a relative for free. No business, no business miles.
• Owners of an S corporation. The company reimburses you instead; see S-corp mileage reimbursement.
• Anyone outside the US. This is US federal tax only, and your state may treat things differently.

Where TaxMiles fits, and where it doesn't

We make TaxMiles, so weigh this accordingly.

• It logs each drive without you starting anything. Drives are detected automatically and you sort them into Business, Personal or Commute, so estimates, supply runs and installs can be marked Business, and the home legs Business or Commute depending on your home office.
• Purposes that fit the work. The built-in list includes Site Inspection and Supply Pickup, and Settings → Auto-Classify → Trip Purposes lets you add your own, like "Estimate", "Install" or "Takedown".
• Deduction ideas for this kind of job. Choose Construction under Settings → Auto-Classify → Line of Work and the Deduction Finder (Taxes → Tax Toolkit, Pro) suggests ladders and equipment, safety gear, and liability insurance.
• The rate follows the date. Trips before July 1, 2026 are valued at 72.5¢ and later ones at 76¢. The 2027 rate isn't in the app yet, so January takedowns will show at 76¢ until the IRS publishes it and the app is updated. The miles are what you need; the dollar figure is an estimate.
• What it can't do. It doesn't send quotes or customer invoices for your install price, track deposits, handle sales tax, or decide whether your home office qualifies. It's a mileage log and estimate tool, not tax advice.
• The free plan covers your first 40 business trips in total, which a busy first season can pass. Pro is $7.99 a month or $59.99 a year.

Frequently asked questions

Are drives to give Christmas light estimates deductible?

Yes, if installing lights is your business. A drive from one customer's house to the next, or to a supplier between jobs, is a trip between work locations. The drive from your home to the first house and back from the last counts too if your home is your principal place of business; otherwise it is usually commuting. In 2026 the rate is 76 cents a mile from July 1.

Which tax year do January takedown miles go in?

The year you drive them. Takedown trips in January 2027 are 2027 business miles at the 2027 standard mileage rate, which the IRS usually announces in December. The install miles from November and December stay in 2026.

If a customer pays in November for a job that ends in January, when is that income?

For most side businesses, which use the cash method, income is counted in the year you actually or constructively receive it. A deposit or full payment received in 2026 is 2026 income even if the takedown happens in 2027. A final payment collected in January is 2027 income.

Can I write off the lights I buy?

If the customer keeps the lights, their cost is a cost of the job, deducted against what you charged. If you own the lights and rent them to customers season after season, they are equipment. With the de minimis safe harbor election you can generally deduct items costing $2,500 or less per invoice or per item instead of depreciating them.

Sources: IRS Publication 463 (2025) (two places of work; temporary work sites in your metro area as commuting; residence as principal place of business); IRS Publication 587 (principal place of business, administrative activities); IRS standard mileage rates (72.5¢ January 1–June 30, 2026; 76¢ July 1–December 31, 2026; no 2027 rate posted as of this date); IRS Publication 538 (cash method: income when actually or constructively received, expenses when paid); IRS Tangible Property Final Regulations (de minimis safe harbor, $2,500 per invoice or item, annual election statement); IRS Self-Employment Tax ($400 threshold). Checked October 30, 2026.

This article is general information for US federal income tax, not tax or legal advice. The worked example is hypothetical: made-up distances, one truck, the standard mileage rate, cash-method accounting. Whether your home office is your principal place of business, and whether your state taxes the lights you sell, depend on your facts. TaxMiles is published by Gigabyte LLC, the company that wrote this article.