IRS Raises Mileage Rate Midyear: What You Need to Know
If you use your vehicle for business, take note: the IRS has increased the standard mileage rate for the second half of 2026.
Effective July 1 through December 31, 2026, the optional standard mileage rate for business use of a car, van, pickup, or panel truck increased to 76 cents per mile, up from 72.5 cents per mile for the first half of the year.
Because the change took effect midyear, taxpayers using the standard mileage method will need to apply the appropriate rate based on when the business miles were driven:
- January 1–June 30, 2026: 72.5 cents per business mile
- July 1–December 31, 2026: 76 cents per business mile
For example, if you drove 2,000 qualifying business miles before July 1 and another 2,000 qualifying business miles after June 30, the two periods would be calculated using different mileage rates.
Other Mileage Rates Changed, Too
Beginning July 1, the standard mileage rate for eligible medical and moving purposes also increased from 20.5 cents to 23.5 cents per mile.
The charitable mileage rate remains unchanged at 14 cents per mile.
Special rules and eligibility requirements apply to medical and moving expenses.
Good Records Still Matter
The mileage rate may have changed, but the importance of maintaining accurate records has not.
If you use a vehicle for business purposes, keep contemporaneous records that document your business mileage and the business purpose of each trip. With two business mileage rates applying during 2026, maintaining records that clearly identify the date of each trip will be particularly important.
Remember that normal commuting between your home and regular place of business generally is not considered deductible business mileage.
What About Employee Mileage Reimbursements?
Businesses that reimburse employees for business use of their personal vehicles should review their reimbursement policies and accounting procedures following the IRS rate change.
The IRS standard mileage rate is an optional rate used for certain tax and reimbursement purposes; it does not necessarily require an employer to reimburse employees at that exact rate. Employers should review their policies and applicable federal and state requirements when determining reimbursement practices.
For California employers in particular, employee expense reimbursement requirements should be evaluated separately from the federal tax treatment of mileage reimbursements.
A Good Time to Review Your Mileage Records
The midyear adjustment makes now a good time for business owners and self-employed individuals to review how they are tracking vehicle use.
Separating mileage driven before July 1 from mileage driven on or after July 1 can help ensure the appropriate rate is used when preparing 2026 tax information.
If you have questions about how the updated mileage rate may apply to your business or tax situation, please contact your DBMCPA advisor.
This article is intended for general informational purposes only and should not be considered tax or legal advice. Individual circumstances vary. Please consult your DBMCPA tax advisor regarding your specific situation.
