IRS Raises Standard Mileage Rates Mid-Year for 2026
Business Drivers Get a Bigger Deduction Beginning July 1
In an unusual mid-year move, the IRS has increased the optional standard mileage rates for the remainder of 2026 due to rising fuel costs. If you use your personal vehicle for business, medical, or certain moving purposes, this change could increase your tax deduction.
The new rates apply to miles driven on or after July 1, 2026.
New Standard Mileage Rates
For miles driven from January 1 through June 30, 2026, the standard mileage rates are:
- Business: 72.5 cents per mile
- Medical: 20.5 cents per mile
- Qualifying military moving: 20.5 cents per mile
- Charitable: 14 cents per mile
For miles driven on or after July 1, 2026, the rates are:
- Business: 76 cents per mile
- Medical: 23.5 cents per mile
- Qualifying military moving: 23.5 cents per mile
- Charitable: 14 cents per mile (unchanged)
Moving expenses are deductible only for qualifying active-duty members of the U.S. Armed Forces and certain members of the intelligence community.
Who Benefits?
- Self-employed individuals
- Independent contractors
- Gig workers (Uber, Lyft, DoorDash, Instacart, etc.)
- Sole proprietors
- Farmers
- Small business owners who use their personal vehicles for business
Keep Good Mileage Records
Because the rate changed in the middle of the year, you'll need to separate your mileage into two periods:
- Miles driven January 1 through June 30
- Miles driven July 1 through December 31
Standard Mileage vs. Actual Expenses
The standard mileage rate is optional. Some taxpayers may receive a larger deduction by deducting their actual vehicle expenses instead. Actual expenses can include:
- Gas and oil
- Repairs and maintenance
- Tires
- Insurance
- Registration fees
- Depreciation (subject to IRS rules)
A Rare Mid-Year Change
The IRS normally announces one mileage rate each fall for the following calendar year. Mid-year adjustments are uncommon and generally occur only when fuel prices change dramatically. The last mid-year increase occurred in 2022.
Bottom Line
If you drive for business, be sure your mileage records reflect the new rates beginning July 1st. Even a few thousand business miles can produce a meaningful additional deduction.
If you have questions about deducting vehicle expenses or would like help determining whether the standard mileage method or actual expenses will save you more tax, contact GurelCPA. We're here to help you keep more of what you earn.
This article is for informational purposes only and should not be relied upon as tax advice. Please contact me directly to discuss how this applies to your individual tax situation.