2026 IRS Mileage Rates: The Mid-Year Increase and How to Claim It

The IRS changed the standard mileage rate in the middle of 2026. That is rare. It last happened in 2022. If you drive for business, you need to split your 2026 miles into two periods to claim the right deduction.

The 2026 rates

• Business: 72.5 cents per mile from January 1 through June 30, and 76 cents per mile from July 1 through December 31.
• Medical and military moving: 20.5 cents per mile through June 30, and 23.5 cents from July 1.
• Charitable: 14 cents per mile all year. This rate is set by law and did not change.

The IRS pointed to higher fuel prices when it announced the increase in July 2026.

How to apply two rates in one year

Add up your business miles for each half of the year separately. For example, 5,000 business miles before July 1 and 5,000 after:

• 5,000 x $0.725 = $3,625
• 5,000 x $0.76 = $3,800
• Total deduction: $7,425

If you used a single blended rate, you would get roughly the same answer only if your driving was spread evenly. A dated log is what lets you split it accurately.

What your mileage log needs

The IRS expects a record made at or near the time of each trip. For every business trip, write down:

• The date
• Where you went
• The business purpose
• The miles driven

An app that tracks trips automatically works, as long as you mark which trips were business. Reconstructing a year of driving from memory in March is what fails in an audit.

Commuting does not count

Driving from home to your regular place of business is commuting and is not deductible. Trips from your office to a client, a supplier, the bank, or a second work location are business trips. If your home office is your principal place of business, trips from home to clients generally count.

Standard rate or actual expenses

You can deduct either the standard mileage rate or your actual costs: gas, insurance, repairs, depreciation, and so on, multiplied by your business-use percentage. If you want the option of using the standard rate for a car you own, you generally have to use it in the first year the car is used for business.

Employees and S corporation owners

W-2 employees generally cannot deduct unreimbursed mileage on their federal return. The better route is reimbursement from the employer under an accountable plan. That includes owners of S corporations: the company reimburses you at the IRS rate, deducts the reimbursement, and the payment is not taxable income to you.

Run the numbers

The Small Business Tax Savings Calculator uses the blended 2026 rate to show what your business miles are worth in tax savings. If you are an S corporation owner, our business tax advisory team can set up an accountable plan for mileage, phone, and home office costs.

Frequently asked questions

Which rate applies to a trip on June 30 or July 1?

The rate is based on the date of the trip. Business trips through June 30, 2026, use 72.5 cents per mile. Trips on or after July 1 use 76 cents.

Can I deduct parking and tolls too?

Yes. Business parking fees and tolls are deductible in addition to the standard mileage rate. Parking at your regular workplace is not.

Can I use the standard mileage rate for a leased car?

Yes. If you choose the standard rate for a leased vehicle, you generally have to keep using it for the entire lease period.

What rate should I use to reimburse employees?

Employers can reimburse business mileage up to the IRS rate without it being taxable to the employee, as long as the reimbursement follows an accountable plan. For 2026, use 72.5 cents for trips through June 30 and 76 cents from July 1.

Does the same rate apply to electric vehicles?

Yes. The standard mileage rate is the same for gas, hybrid, and electric vehicles.