Understanding the 2026 IRS Mileage Rate Changes for Small Business Owners
Updated: Aug 12
Quick answer: For 2026, the IRS business standard mileage rate is 72.5 cents per mile from January 1 to June 30, and 76 cents per mile from July 1 to December 31. Because the rate changed mid-year, you must split your mileage log by date and apply each rate to the correct half of the year to claim the full deduction.
Key Takeaways
Business mileage rate: 72.5¢ (Jan 1–Jun 30) and 76¢ (Jul 1–Dec 31, 2026).
The IRS raised the rate mid-year to reflect rising fuel costs — a rare move.
Medical and moving miles rose to 23.5¢ (effective Jul 1, 2026); charitable stays at 14¢.
Split your log by date, or you'll under-claim your deduction.
What is the 2026 IRS Standard Mileage Rate?
The standard mileage rate is the per-mile figure you use to deduct the cost of running your vehicle for business. This method is simpler than tracking every gas receipt, oil change, and repair. For 2026, the rate changed twice:
January 1 – June 30, 2026: 72.5 cents per mile (up 2.5 cents from 2025's 70 cents).
July 1 – December 31, 2026: 76 cents per mile.
The IRS made this mid-year adjustment to 76 cents to keep pace with rising fuel costs. Mid-year changes are rare, so it's easy to overlook if you set up your tracking in January and didn’t revisit it.
Why the Split Rate Matters for Your Deduction
Because the rate changed on July 1, you can't simply multiply your total 2026 business miles by one number. You need to split your log into two sections:
Miles driven January through June are deducted at 72.5 cents.
Miles driven July through December are deducted at 76 cents.
Example: If you drove 6,000 business miles in the first half and another 6,000 in the second half, your calculation would be:
(6,000 × $0.725) + (6,000 × $0.76) = $4,350 + $4,560 = $8,910.
If you applied the old rate to all 12,000 miles, you would shortchange yourself by more than $200.
What Changed for Medical, Moving, and Charitable Miles
Medical and moving miles increased to 23.5 cents per mile, effective July 1, 2026 (up from 20.5 cents). The moving deduction is limited to active-duty Armed Forces members and, new for 2026 under the One, Big, Beautiful Bill, certain members of the intelligence community.
Charitable miles remain at 14 cents per mile. This rate is fixed by law and does not change year to year.
What Small Business Owners Should Do Now
1. Separate Your Mileage Log by Date
Make sure to separate your mileage log by date. This way, you can apply the correct rate to each half of the year. If you use a tracking app, confirm that it applied the July 1 change automatically — not all apps do.
2. Check Whether the Standard Rate is Your Best Option
Consider whether the standard mileage rate is the best choice for you. You can also deduct actual vehicle expenses, such as gas, insurance, repairs, and depreciation. This option may be more beneficial for some vehicles. Generally, you choose your method in the first year the car is used for business, so consult your accountant before making a decision.
3. Update Employee Reimbursements
Make sure to update employee reimbursements for the second half of the year. This ensures you’re not underpaying drivers or overpaying, which could create a taxable-income issue.
The Bottom Line
Two rate changes in one year mean that dates matter. Keep a clean, date-stamped log. Apply 72.5¢ to first-half miles and 76¢ to second-half miles to claim the full deduction. If your log is messy or you're unsure which method saves more, consult a tax professional before filing.
Frequently Asked Questions
What is the IRS business mileage rate for 2026?
It's 72.5 cents per mile from January 1 to June 30, 2026, and 76 cents per mile from July 1 to December 31, 2026.
Why did the mileage rate change mid-year in 2026?
The IRS raised the business rate to 76 cents on July 1 to reflect rising fuel costs. Mid-year adjustments are uncommon.
How do I calculate my mileage deduction with two rates?
Split your log by date. Multiply your January–June business miles by $0.725 and your July–December business miles by $0.76, then add the two totals.
What is the 2026 medical and moving mileage rate?
23.5 cents per mile, effective July 1, 2026. The moving deduction applies only to active-duty Armed Forces members and certain intelligence community members.
What is the 2026 charitable mileage rate?
14 cents per mile. This rate is set by statute and does not change year to year.
This is general information, not tax advice. Confirm current figures with the IRS or your accountant before filing.
Comments