IRS Mileage Rate 2026: 76¢ per Mile After the July Increase

What changed in July 2026 (the mid-year rate increase)

The IRS almost always sets one mileage rate for the whole year in December, then leaves it alone. Once in a while, when driving costs jump enough mid-year, it steps in and raises the rate partway through. It did that in July 2026, and the last time before this was 2022. The reason this time was fuel: gas prices climbed hard through the first half of the year, so the IRS bumped the business rate to keep it in line with what it actually costs to run a car.

Here's the part that matters for your taxes: the rate you use depends on when you drove, not when you file. Miles you drove from January 1 through June 30, 2026 use the old rate. Miles from July 1 through December 31 use the new one. So on your 2026 return you'll likely split your business miles into two buckets and add the two deductions together. A good mileage log already stamps the date on every trip, which is all you need to sort them.

The 2026 IRS standard mileage rates

Here are the standard mileage rates for 2026, with the mid-year split and the two prior years so you can file back taxes correctly.

Use the rate that matches when you drove: first-half miles at 72.5 cents, second-half miles at 76 cents, and each earlier year at its own rate. The mid-year increase comes straight from the IRS Internal Revenue Bulletin 2026-29 (Announcement 2026-11).

Charity stays at 14 cents because that rate is fixed by law, not by the IRS. It takes an act of Congress to move it, so it doesn't rise with gas prices the way the business rate does.

One more note for 2026: the moving-mileage rate, long limited to active-duty Armed Forces, now also covers certain members of the intelligence community. For everyone else, moving miles are not deductible.

Who can use the standard mileage rate

If you're an employee

Since the 2018 tax law, most W-2 employees can't deduct unreimbursed mileage on a federal return. The fix is reimbursement: ask your employer to pay you for business miles, and many use the IRS rate as the benchmark. A reimbursement at 76 cents a mile is tax-free to you, so the rate still matters even if you never file a Schedule C (the tax form self-employed people use to report business profit).

If you're self-employed

This is where the rate pays off. If you file a Schedule C (sole proprietors, single-member LLCs, 1099 contractors), every business mile is a deduction. Drive 12,000 business miles at the new 76-cent rate and that's a $9,120 deduction (12,000 × $0.76). At a 22% tax rate, that's about $2,000 back in your pocket from miles you were already driving. Miles you drove earlier in the year count too, just at the 72.5-cent rate.

If you own a business with a vehicle

You choose between the standard rate and actual expenses (more on that next). A car or light truck under 6,000 pounds can use either. Heavier trucks and fleets of five or more vehicles used at the same time must use actual expenses, not the cents-per-mile rate.

Standard rate vs. actual expenses

You get one of two methods. Pick the one that gives the bigger deduction.

One rule trips people up: if you want to use the standard rate for a car you own, you must choose it the first year you use the car for business. Pick actual expenses that first year and you're locked out of the standard rate for that vehicle for good. Either way, you need a mileage log, and if you go the actual-expense route, a simple expense spreadsheet keeps the gas, repair, and insurance receipts in one place.

How to turn miles into a deduction (and why a gas receipt isn't enough)

A huge share of small businesses drive for work. We see it in our own data, where about 4 in 10 active accounts log fuel and auto receipts. But the standard mileage method doesn't run on gas receipts. It runs on a mileage log, where each trip shows four things:

• The date you drove
• Where you went
• The business reason for the trip
• The miles

That gap is where the money leaks out. You can have a shoebox full of gas receipts and still lose the mileage deduction, because the IRS wants the miles, not the fill-ups. A log that shows the date, destination, business purpose, and miles for each trip is what holds up. The date matters even more in 2026, since it tells you whether a trip earns 72.5 cents or 76 cents.

How you lose the deduction: you scribble one number at tax time with no trip-by-trip record behind it. A log you rebuild from memory in April is the first thing an audit picks apart. Write each trip down the day you drive it. Our free mileage log template gives you a place to do exactly that, on paper, in Excel, or in Google Sheets.

One week of a realtor's trips, logged the day they happened. These 117 miles are from the first half of 2026, so they're worth $84.83 at 72.5 cents; the same week from July on is worth $88.92 at 76 cents. (Sample entries for illustration.)

Real examples of the 2026 deduction

Four different drivers, shown here at the first-half rate of 72.5 cents. At the new 76-cent rate the numbers climb: 9,000 miles is $6,840 and 25,000 miles is $19,000. The more you legitimately drive for the business, the bigger the deduction.

A deduction lowers your taxable income, so the cash you keep depends on your tax bracket. The dollars-back numbers below use the new 76-cent rate and a common 22% bracket; your real number depends on yours, and on how many of your miles fell before July.

The rideshare driver

A part-time rideshare and delivery driver puts 18,000 business miles on the car in a year. At 76 cents, that's a $13,680 deduction, or about $3,010 back at a 22% bracket. Gig drivers usually win with the standard rate, since the miles are high and the car is ordinary. (Our Uber driver expenses spreadsheet walks through the rest of a gig driver's write-offs.)

The realtor

A real estate agent drives 14,000 miles to showings, inspections, and closings. That's $10,640 off the taxable profit at the new rate, about $2,340 back at 22%. Realtors are the classic case where the miles dwarf the gas receipts.

The home service business

A house cleaner or handyman driving 9,000 business miles between jobs gets a $6,840 deduction, around $1,505 back at 22%. Even a "small" amount of driving adds up to real money once you log a full year.

Common mileage mistakes that cost real money

• Counting your commute. Driving from home to a regular workplace is personal, not business. Trips between job sites, to clients, and to the bank are the deductible ones.
• Using one rate for all of 2026. The rate changed on July 1, so first-half miles are 72.5 cents and second-half miles are 76 cents. A dated log keeps them straight.
• Keeping gas receipts instead of a log. Receipts back up the actual-expense method, but the standard rate needs your miles logged trip by trip.
• Reconstructing the log in April. A contemporaneous log (written as you go) holds up; a guess does not.
• Forgetting the small trips. The post office run, the supply pickup, and the drive to the client lunch all count, and they add up.

Let Shoeboxed track the miles for you

Logging every trip by hand is the part people quit. That's why the Shoeboxed app tracks your business miles automatically with GPS, then builds an IRS-ready mileage log with the date, route, and miles for each drive. Because every trip is dated, the app already knows which miles earn 72.5 cents and which earn 76 cents, so you don't have to do that math yourself. No more scribbling odometer readings in the car.

And because we've scanned receipts since 2007, the same account holds the rest of your tax records: snap a photo, forward an email, or mail us a Magic Envelope, and we store the image and pull out the vendor, date, and total. Your miles and your receipts end up in one place, ready at tax time.

IRS mileage rate FAQ

What is the 2026 IRS mileage rate?

It depends on when you drove. For business miles driven July 1, 2026 or later, it's 76 cents per mile. For business miles driven January through June, it's 72.5 cents. Medical and military moving miles are 23.5 cents from July on (20.5 cents before), and charity is 14 cents all year.

Why did the mileage rate change in the middle of the year?

Fuel costs rose enough in the first half of 2026 that the IRS raised the business rate on July 1 to keep it in line with the real cost of driving. Mid-year changes are rare; the last one was in 2022.

How do I calculate my mileage deduction?

Multiply your business miles by the rate for when you drove them. 10,000 business miles from July on is 10,000 × $0.76 = $7,600. Miles you drove earlier in 2026 use $0.725, so you add the two buckets together.

Can I deduct mileage as a W-2 employee?

Not on a federal return for most employees since 2018. Ask your employer to reimburse you instead; reimbursement at the IRS rate is tax-free.

Do I need a mileage log?

Yes. Both methods require records, and the standard rate specifically needs a trip-by-trip log of date, destination, purpose, and miles. Write it down as you drive.

Can I switch between the standard rate and actual expenses?

You must use the standard rate the first year if you want the option later. After that, switching has limits, especially once you've claimed depreciation. When in doubt, ask your tax preparer.

About the author. I'm Doug. I bought Shoeboxed in late 2025 with an SBA loan after fifteen years of running other people's companies as CEO. I'd used Shoeboxed myself back in 2010 at a previous gig and called it magical even then. I use it daily now. Small business owners deserve every dollar they're legally entitled to keep, which is why I bought Shoeboxed and work hard to make it better.

Stop losing mileage deductions. The Shoeboxed app tracks your business miles with GPS and builds an IRS-ready log, while we scan and organize your receipts. See how it works.

Sources

• IRS: Internal Revenue Bulletin 2026-29 (Announcement 2026-11, mid-year rate increase)
• IRS: 2026 standard mileage rates (Notice 2026-10)
• IRS: Standard mileage rates
• Shoeboxed customer data: 5,056 of 12,695 active accounts log vehicle receipts (June 2026)