IRS Increases Standard Mileage Rate Mid-Year for 2026
The IRS has announced an increase to the optional standard mileage rates beginning July 1, 2026, due to rising fuel prices. This mid-year adjustment affects taxpayers who use their personal vehicles for business, medical, or qualified moving purposes.
If you're a business owner, self-employed professional, or employer who reimburses employees for business travel, here's what you need to know.
New IRS Mileage Rates Effective July 1, 2026
Beginning July 1, 2026, the IRS standard mileage rates are:
Purpose New Rate
- Business 76¢ per mile
- Medical 23.5¢ per mile
- Moving (qualified active-duty military only) 23.5¢ per mile
- Charitable 14¢ per mile (unchanged by law)
The IRS notes that the charitable mileage rate remains fixed by Congress and does not change with fuel prices.
Don't Forget: There Are Two Mileage Rates for 2026
Because this change takes effect mid-year, business owners must use the correct mileage rate depending on when the miles were driven.
January 1 through June 30, 2026
Use the mileage rates previously announced in Notice 2026-10.
July 1 through December 31, 2026
Business: 76¢ per mile Medical/Moving: 23.5¢ per mile
If you track mileage throughout the year, be sure your accounting software, mileage tracking app, or reimbursement policy reflects this change.
Who Does This Affect?
The updated mileage rates may affect:
- Self-employed individuals
- Small business owners
- Independent contractors
- Real estate professionals
- Sales representatives
- Consultants
- Business owners who use personal vehicles for work
- Employers who reimburse employees for business mileage
If you reimburse employees using the IRS standard mileage rate, you'll want to update your reimbursement rate for travel occurring on or after July 1, 2026.
Why Did the IRS Increase the Mileage Rate?
The IRS stated that the adjustment was made because of recent increases in fuel prices. The standard mileage rate is intended to help taxpayers estimate the deductible costs of operating a vehicle for qualifying purposes without tracking every individual vehicle expense.
Standard Mileage vs. Actual Expenses
Many business owners ask whether they should use the standard mileage rate or deduct actual vehicle expenses.
The standard mileage method is often simpler because you only need accurate mileage records.
The actual expense method allows you to deduct expenses such as:
- Gas
- Oil changes
- Repairs
- Tires
- Insurance
- Registration fees
- Depreciation (when applicable)
The best option depends on your individual situation, how much you drive, and your vehicle expenses. Working with your CPA can help determine which method provides the greater tax benefit.
Good Mileage Records Matter
No matter which deduction method you choose, maintaining accurate records is essential.
The IRS recommends documenting:
- Date of each trip
- Starting location
- Destination
- Business purpose
- Number of miles driven
Using a mileage tracking app or keeping a contemporaneous mileage log can make tax time much easier and help support your deduction if you're ever audited.
Final Thoughts
The IRS mileage rate increase may seem small, but for business owners who drive frequently, it can make a meaningful difference in deductible expenses and employee reimbursements.
Because this is a mid-year change, it's especially important to use the correct mileage rate based on when the travel occurred.
If you're unsure how this affects your business, reimbursement policy, or tax deductions, we're here to help.
Need Help Tracking Business Mileage?
The IRS mileage rate changed effective July 1, 2026, making it more important than ever to keep accurate mileage records and apply the correct rate to your deductions or employee reimbursements.
At Kamish & Associates CPA Firm, we help business owners stay compliant with changing tax laws while identifying opportunities to maximize deductions throughout the year. Whether you need bookkeeping, tax preparation, or proactive tax planning, our team is here to help.
👉 Learn more about our services: https://kamishcpa.com/services
Frequently Asked Questions
When does the new IRS mileage rate take effect?
The revised IRS standard mileage rates apply to travel on or after July 1, 2026. Mileage driven before July 1, 2026, uses the previously announced rates.
What is the IRS business mileage rate for the second half of 2026?
The business mileage rate is 76 cents per mile for travel occurring between July 1 and December 31, 2026.
Why did the IRS change the mileage rate?
The IRS increased the standard mileage rates because of recent increases in fuel prices.
Do I need to keep a mileage log?
Yes. To support your deduction, you should maintain a mileage log that includes the date, destination, business purpose, and miles driven for each trip.
Should I use the standard mileage rate or actual vehicle expenses?
That depends on your situation. Some taxpayers benefit more from the standard mileage method, while others save more by deducting actual vehicle expenses. A CPA can help determine which method provides the greater tax benefit.
Have questions? We're here to help.
Reach out to Kamish & Associates — Tampa Bay's trusted CPA firm.
Zach Kamish
Kamish & Associates CPA Firm · Tampa Bay, FL