IRS Mileage Rate for 2026: Midyear Increase Explained

2026 IRS mileage rates at a glance

The July 1 increase followed a rare midyear IRS adjustment in response to higher fuel costs.

For preparers, the practical takeaway is simple: 2026 mileage must be separated by date before applying the standard mileage rate.

Why did the IRS mileage rate change in July 2026?

The IRS originally announced the 2026 standard mileage rates at the end of 2025.

The original business rate was 72.5 cents per mile, up from 70 cents in 2025. The medical and qualifying moving rate was originally 20.5 cents per mile, while the charitable rate remained 14 cents.

The IRS later revised the rates because of increased fuel costs.

Effective July 1, 2026:

• the business rate increased from 72.5¢ to 76¢ per mile
• the medical and qualifying moving rate increased from 20.5¢ to 23.5¢ per mile
• the charitable rate remained 14¢ per mile

This makes 2026 a split-rate year similar to other years in which the IRS changed mileage rates midyear.

How to calculate the 2026 business mileage deduction

When a taxpayer has business mileage both before and after July 1, the mileage should be separated into the two applicable periods.

Example

A self-employed taxpayer drives:

• 4,000 business miles from January 1 through June 30
• 6,000 business miles from July 1 through December 31

The standard mileage calculation is:

First half of 2026

4,000 miles × $0.725 = $2,900

Second half of 2026

6,000 miles × $0.76 = $4,560

Total standard mileage amount

$2,900 + $4,560 = $7,460

A preparer should not simply multiply all 10,000 miles by either the 72.5-cent or 76-cent rate.

What does the business standard mileage rate cover?

The standard mileage rate is an optional method for calculating the deductible cost of operating a vehicle for business use.

Instead of separately calculating the business portion of expenses such as fuel, maintenance, repairs, insurance and depreciation, an eligible taxpayer may multiply qualifying business miles by the applicable standard mileage rate.

Taxpayers who qualify may instead use the actual expense method.

Under the actual expense method, the business portion of expenses such as gas, oil, repairs, tires, insurance, registration fees, licenses and depreciation or lease payments is calculated based on business use.

Because the two methods can produce different results, preparers may want to compare them when the taxpayer is eligible to choose either method.

Can parking fees and tolls be deducted with the standard mileage rate?

Generally, business-related parking fees and tolls may be deductible in addition to the standard mileage amount.

The standard mileage rate should not automatically be treated as the taxpayer's entire vehicle-related deduction without considering other allowable vehicle expenses.

Tax preparers should also distinguish deductible business parking from personal commuting expenses.

Who can use the standard mileage rate?

The standard mileage method is optional, but not every taxpayer or vehicle qualifies.

For an owned vehicle used in business, a taxpayer generally must choose the standard mileage method in the first year the vehicle is available for business use if the taxpayer wants the option of using that method.

In later years, an eligible taxpayer who owns the vehicle may generally switch between the standard mileage method and actual expenses, subject to the applicable depreciation rules.

For a leased vehicle, once the taxpayer chooses the standard mileage method, it generally must be used for the entire lease period, including renewals.

The standard mileage method also generally cannot be used when a taxpayer:

• operates five or more vehicles at the same time as part of a fleet
• previously claimed certain accelerated depreciation methods on the vehicle
• claimed a Section 179 deduction on the vehicle
• claimed special depreciation allowance on the vehicle

These limitations are important when reviewing a client's prior-year depreciation and vehicle treatment.

What is the 2026 medical mileage rate?

For qualifying medical transportation, the 2026 standard mileage rate is:

• 20.5 cents per mile for January 1 through June 30
• 23.5 cents per mile for July 1 through December 31

The same split-year concept applies: mileage should be separated based on when the transportation occurred.

What is the 2026 moving mileage rate?

For taxpayers who qualify for a deductible moving expense under current law, the mileage rate is:

• 20.5 cents per mile for January 1 through June 30
• 23.5 cents per mile for July 1 through December 31

Moving-expense deductions are limited to taxpayers who meet specific statutory requirements. Preparers should verify that the taxpayer qualifies before applying the moving mileage rate.

What is the 2026 charitable mileage rate?

The charitable mileage rate is 14 cents per mile for all of 2026.

Unlike the business and medical/moving rates, the charitable mileage rate did not change on July 1.

Is the IRS mileage rate the same as a mileage reimbursement rate?

The IRS standard mileage rate is often used by employers when reimbursing employees for business mileage, but it is fundamentally an optional federal tax rate used for deductible vehicle expenses and certain substantiated mileage allowances.

The phrase “2026 mileage reimbursement rate” is commonly used to refer to the IRS rate, but preparers should not assume that every employer is required to reimburse mileage at exactly the IRS rate.

The tax treatment of employer reimbursements depends on the facts and the reimbursement arrangement, including whether the requirements of an accountable plan are satisfied.

Does the standard mileage rate include depreciation?

Yes. A portion of the business standard mileage rate is treated as depreciation for basis-adjustment purposes.

For 2026, the IRS states that 35 cents per business mile is treated as depreciation when the business standard mileage rate is used.

That amount can matter later when determining the vehicle's adjusted basis and gain or loss on disposition.

This is easy to overlook when a client has used the standard mileage method for several years.

What records should clients keep?

The standard mileage rate does not eliminate the need to substantiate business use.

Preparers should expect clients to maintain records showing information such as:

• date of the trip
• business purpose
• destination or route
• number of business miles driven
• total mileage or other records necessary to establish business-use percentage

For 2026, mileage records should make it possible to distinguish miles driven before July 1 from miles driven on or after July 1.

A year-end mileage total by itself may not provide enough information to correctly apply the two different 2026 rates.

What tax preparers should watch for in 2026

The midyear adjustment creates several easy mistakes.

Preparers should verify:

1. Mileage is divided at June 30 / July 1. Business and medical or qualifying moving mileage use different rates for the two halves of 2026.
2. The correct purpose is identified. Business, medical, moving and charitable mileage do not all use the same rate.
3. The client is eligible to use the standard mileage method. Prior depreciation or Section 179 treatment may affect eligibility.
4. Leased vehicles are treated consistently. A taxpayer who elects the standard mileage method for a leased vehicle generally must continue using it for the lease period.
5. Parking and tolls are considered separately where allowed.
6. Mileage logs support the dates claimed. This is particularly important in a split-rate year.
7. Vehicle basis is adjusted for depreciation embedded in the business mileage rate.

Frequently asked questions

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