IRS Raises Standard Mileage Rates Midyear: What You Need to Know

The IRS increased standard mileage rates for business, medical, and certain qualifying moving expenses beginning July 1, 2026, reflecting higher fuel prices. Because 2026 has two sets of mileage rates, make sure to separate qualifying mileage driven before and after July 1st. 

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

The standard mileage method is optional. It is commonly used by self-employed individuals and businesses and may apply to eligible employer reimbursements, although most employees cannot deduct unreimbursed business mileage.

Eligible taxpayers may instead deduct the business share of actual costs such as gas, insurance, repairs, registration, and depreciation.

Switching methods may be limited. Vehicle owners generally must choose standard mileage in the first year of business use; lessees who choose it generally must continue through the full lease, including renewals. Before switching, compare the potential deduction and confirm eligilibity.

Good Mileage Records Still Matter

Good records remain essential.

For each trip, document the date, destination, purpose and mileage. Businesses should review reimbursement policies for employees using personal vehicles. The revised rate applies only when both the travel expense and reimbursement 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

Standard mileage is simpler, but actual expenses may provide a better result for vehicles with higher depreciation, insurance, repair, or operating costs. 

Our team can help you compare methods, review mileage records and reimbursement policies, and understand how the 2026 changes affect you. Contact us to learn more about our tax planning and compliance services.