IRS Mileage Rate 2026: 72.5¢, Then 76¢ From July 1

The short answer

2026 is a split year. The IRS raised its standard mileage rates on July 1, so the rate depends on the date you drove:

Purpose	January 1 to June 30, 2026	July 1 to December 31, 2026
Business	72.5¢ a mile	76¢ a mile
Medical, and moving for eligible military	20.5¢ a mile	23.5¢ a mile
Charity	14¢ a mile	14¢ a mile

The mid-year change came in Announcement 2026-11, published in Internal Revenue Bulletin 2026-29. It applies to expenses paid or incurred on or after July 1, 2026, and the IRS gave the reason directly: “recent increases in the price of fuel.” The charity rate did not move, because it is fixed by statute (section 170(i) of the tax code) rather than set by the IRS.

If you reimburse or claim miles across the whole year, price each trip at the rate for its date. Using the January rate for everything undercounts the second half of the year.

Who uses which rate

Business (72.5¢, then 76¢). The IRS lists this as the rate for business use of a car, van, pickup or panel truck. It is used two ways:

• Self-employed people deduct business miles on Schedule C, as IRS Topic 510 explains, using either the standard mileage rate or their actual car expenses.
• Employers commonly use it as the benchmark for reimbursing employees who drive their own cars for work.

Most employees cannot deduct unreimbursed car expenses on their federal return. Topic 510 names the exceptions, including Armed Forces reservists and qualified performing artists. The January 2026 news release also notes that taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses, apart from certain educator expenses.

Medical (20.5¢, then 23.5¢). Driving to medical care counts as a medical expense. IRS Topic 502 says you can use the standard medical mileage rate plus tolls and parking, but only if you itemize on Schedule A, and only medical expenses above 7.5% of your adjusted gross income are deductible.

Moving (same as medical). According to the IRS release for 2026, the moving rate applies only to active-duty members of the Armed Forces moving under orders for a permanent change of station and, under newer law, certain members of the intelligence community.

Charity (14¢). For miles you drive while volunteering for a qualified charity. Publication 463 notes volunteers may be able to deduct some costs as a charitable contribution.

Worked example: an employee reimbursed at the IRS rate

A field technician drives her own car for work and her employer reimburses at the IRS business rate. Her log shows 1,850 business miles in May 2026 and 2,100 in September 2026.

• May, before the change: 1,850 × $0.725 = $1,341.25
• September, after the change: 2,100 × $0.76 = $1,596.00
• Total: $2,937.25

If payroll had kept using 72.5 cents after July 1, the September miles would have been paid at 2,100 × $0.725 = $1,522.50, which is $73.50 short. Worth checking on your expense reports for the second half of the year.

Worked example: a self-employed driver

A self-employed photographer drives 4,000 business miles from January to June and 5,000 from July to December, and paid $180 in business parking and tolls.

• First half: 4,000 × $0.725 = $2,900.00
• Second half: 5,000 × $0.76 = $3,800.00
• Parking and tolls: $180.00
• Total car deduction under the standard rate: $6,880.00

Publication 463 says business parking fees and tolls can be deducted on top of the standard mileage rate. Parking at your regular place of work cannot: the IRS treats that as commuting.

Two rules that catch people out, both from Topic 510:

• For a car you own, you must choose the standard mileage rate in the first year you use the car for business. In later years you can switch between it and actual expenses.
• You cannot use the standard rate if you operate five or more cars at the same time, as in a fleet.

How employer reimbursement is taxed

Reimbursement at or below the IRS rate is usually tax-free, if your employer runs an accountable plan. Publication 463 sets three rules for that:

1. The expenses have a business connection.
2. You account for them to your employer within a reasonable period of time.
3. You return any excess reimbursement within a reasonable period of time.

When those are met and the allowance is at or below the federal rate, Publication 463 says it is not included in box 1 of your W-2, and you do not report it on your return.

If your employer pays more than the IRS rate, the extra is taxable. Pub 463 says the amount up to the federal rate goes in box 12 of your W-2 under code L and is not taxable, while the excess is included in box 1 as wages.

Example: your employer pays 80 cents a mile and you drive 1,000 business miles in August 2026. You receive $800. At the federal rate of 76 cents, $760 is tax-free and the remaining $40 is reported as wages.

Records the IRS expects

Publication 463 lists what your records need to show for car expenses: the mileage for each business use, the total miles for the year, the date of each use, the destination and the business purpose. A few practical points from the same publication:

• Write it down at or near the time. A record made at the time carries more weight than one rebuilt later. Pub 463 says a log kept weekly that covers the week’s use counts as a timely kept record.
• A notebook, diary or app all work. The format does not matter. The detail does.
• Commuting is not business mileage. Driving between home and your main or regular place of work is a personal commuting expense, no matter how far it is, and even if you take work calls on the way.
• Keep the records. Pub 463 says to generally keep records supporting a deduction for 3 years from the date you file the return that claims it.

Common mistakes

• Using one rate for all of 2026. Trips from July 1 get 76 cents; trips before get 72.5 cents.
• Counting the commute. Home to your regular workplace is never business mileage.
• Rebuilding a log at tax time. Recreated mileage is weaker evidence than a log kept as you go.
• Claiming unreimbursed miles as an employee. Unless you are in one of the listed exceptions, there is no federal deduction to claim.
• Forgetting parking and tolls. Business parking and tolls are separate from the per-mile rate.

When to get a professional

Talk to a tax professional if you are choosing between the standard rate and actual expenses for a new business vehicle, since the first-year choice affects later years. The same goes for leased vehicles, cars used partly for business and partly personally, or an employer reimbursement arrangement that does not clearly meet the accountable plan rules.

To price your own log, the mileage reimbursement calculator applies the correct 2025 or 2026 IRS rate to each trip by date and purpose, totals business, medical and charity miles, and lets you enter your employer’s own rate instead.

General information about federal tax rules as of October 2026, not tax advice. State rules on employer reimbursement can differ.