IRS raises the standard mileage rates for the second half of 2026

Tax, Audit, Firm and Regulatory News

Posted on September 22, 2026

If you use your vehicle for business, medical care, or certain qualifying moves, the standard mileage rate increased on July 1, 2026. The IRS said the increases reflect recent increases in fuel prices.

The midyear change means 2026 has two sets of mileage rates, so taxpayers will need to distinguish between qualifying mileage from the first and second halves of the year.

2026 mileage rates changed on July 1

For miles driven from January 1 through June 30, 2026, the standard mileage rates are:

72.5 cents per mile for business use
20.5 cents per mile for medical purposes
20.5 cents per mile for qualifying moving purposes for eligible active-duty members of the Armed Forces and certain members of the intelligence community
14 cents per mile for charitable service

For miles driven from July 1 through December 31, 2026, the rates are:

76 cents per mile for business use
23.5 cents per mile for medical purposes
23.5 cents per mile for qualifying moving purposes for eligible active-duty members of the Armed Forces and certain members of the intelligence community
14 cents per mile for charitable service

The charitable mileage rate did not change because it is set by federal law. If you track mileage through an app or accounting system, ensure the new rates were applied beginning July 1.

The standard mileage rate is optional

Eligible taxpayers do not have to use the standard mileage method. The business rate is commonly used by self-employed taxpayers and businesses and may also be used for qualifying employer reimbursements. However, most employees cannot deduct unreimbursed business mileage on their individual returns.

Eligible taxpayers may instead deduct the business portion of actual vehicle expenses, depending on their situation. Those expenses can include items such as gas, insurance, repairs, registration fees, and depreciation.

There are also rules that can limit your ability to switch between the standard mileage and actual-expense methods. For example, if you own a vehicle and want to use the standard mileage rate, the IRS generally requires you to choose that method in the first year the vehicle is available for business use. If you lease a vehicle and choose the standard mileage rate, you generally must continue using that method for the entire lease period, including renewals.

Before changing methods, compare the potential deduction and confirm that you remain eligible to make the switch.

Good mileage records still matter

The higher mileage rate does not change the need for good documentation. Your records should generally show the date, destination, business purpose, and number of miles for each trip.

For example, an entry that says “client meeting, 42 miles, August 12” is much more useful than trying to reconstruct several months of driving at tax time.

If employees use personal vehicles for company business, businesses should also review their mileage reimbursement policies and systems. For the revised rate to apply to a mileage allowance, both the employee’s underlying transportation expense and the employer’s reimbursement must occur on or after July 1.

Review your mileage log and reimbursement settings now rather than waiting until year-end.

Compare your options before year-end

The standard mileage rate keeps the calculation relatively simple, but it is not always the best choice. A vehicle with high depreciation, insurance, repairs, or other operating costs may produce a different result under the actual-expense method.

We can help you review your vehicle expenses, mileage records, and reimbursement policies to determine how the 2026 changes apply to you.

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