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In most years, the rate is set once in late December and remains in effect for all 12 months but with ever increasing fuel costs the IRS made the decision to rais the rate. A midyear change is rare, and the last one was in 2022, when fuel prices spiked. When it happens, a single calendar year ends up with two rates, and you have to track which miles fall in which period.

The IRS raised the optional standard mileage rate for business use to 76.0 cents per mile for July 1 2026 through December 31, 2026, up from the 72.5 cents that applied for the first half of the 2026 year. The change stems from Announcement 2026-11, which modified the original 2026 rates set out in IRS Notice 2026-10 following a sharp rise in fuel prices. It is the first midyear mileage change since 2022, so 2026 now has two business rates instead of one. The medical and moving rate also rose, from 20.5 cents to 23.5 cents per mile, while the charitable rate stays fixed by law at 14 cents.
The standard mileage rate is an optional per-mile figure the IRS sets each year so you can deduct the cost of driving for business without adding up every gas receipt, repair bill, and depreciation entry. You multiply your business miles by the rate and deduct the result.
Because the change took effect midyear, the rate you use depends on when you drove the miles. Miles driven January 1 through June 30 use the original rate; miles driven July 1 through December 31 use the higher one.

The business rate is the one that matters for most filers. The moving rate applies only to active-duty members of the Armed Forces and certain members of the intelligence community relocating on orders. The charitable rate is set by statute, so it did not move. Therefore If you use the standard mileage method, you can no longer multiply your full-year business miles by a single number. You apply 72.5 cents to miles driven through June 30 and 76 cents to miles driven from July 1 onward.

FAQ

Do employers have to use the IRS standard mileage rate for reimbursements?

Not necessarily. The IRS rate is commonly used because it provides a simple way to reimburse employees for business use of a personal vehicle, but employers should review their written reimbursement policy and any applicable state law. For 2026, reimbursements should be tied to the date the miles were driven so that January 1 through June 30 miles use 72.5 cents and July 1 through December 31 miles use 76.0 cents.
What records should I keep to support a standard mileage deduction?
Keep a contemporaneous mileage log showing the date of each trip, starting point, destination, business or other qualifying purpose, and number of miles driven. For 2026, the date is especially important because it determines which half-year rate applies. Calendar entries, appointment records, invoices, and map history can help support the log, but they should not replace a regular mileage record.

Can I deduct commuting miles between my home and regular workplace?

Generally, no. Regular commuting between your home and your main place of work is personal mileage, even if you take business calls or carry work materials in the car. Business mileage generally begins when you drive from one work location to another, visit a client, attend a business meeting away from your regular workplace, or travel for another ordinary and necessary business purpose.

Can I deduct parking fees and tolls in addition to the standard mileage rate?

Yes, business-related parking fees and tolls are generally tracked separately and may be deductible in addition to the standard mileage amount. However, parking at your regular workplace is typically treated as a commuting cost and is not deductible as business mileage.

What if I use the same vehicle for both business and personal driving?

Only the qualifying business miles are deductible. Personal miles, commuting miles, and other nonbusiness travel should be excluded. If you also use the car for medical, charitable, or qualified moving purposes, keep those miles in separate categories because each category has its own rate and rules.

Can employees deduct unreimbursed business mileage on their personal returns?

In most cases, employees cannot deduct unreimbursed employee travel expenses as miscellaneous itemized deductions under current law. There are limited exceptions for certain categories of workers, such as qualified performing artists, certain state or local government officials, eligible educators, and certain members of a reserve component of the Armed Forces. Employees should therefore focus on timely reimbursement through their employer when available.

Does the midyear change affect medical, moving, and charitable mileage too?

Yes, for medical and qualified moving mileage, but not for charitable mileage. Medical and qualified moving miles use 20.5 cents for January 1 through June 30 and 23.5 cents for July 1 through December 31. The charitable mileage rate remains 14 cents per mile because that rate is fixed by statute.

Does the 76.0 cent rate apply to miles I drove before July 1, 2026?

No. The 76.0 cent rate applies only to business miles driven on or after July 1, 2026. Miles driven from January 1 through June 30 stay at 72.5 cents. You total the two halves separately and add them together on your Schedule C.

Can I claim actual vehicle expenses instead of the standard mileage rate?

Yes. You can deduct your actual costs, such as fuel, maintenance, insurance, and depreciation, instead of the standard rate. To keep the option open, you generally have to use the standard mileage method in the first year the car is available for business, and a leased vehicle must stay on one method for the full lease. Compare both to determine the most advantageous way to file.

What if I did not record the date of each trip?

Reconstruct your travel log as closely as you can from calendars and invoices, since a dated record is what supports splitting your miles at July 1. Going forward, log the date, purpose, and distance of every business trip so the two rate periods stay clean.

Please be advised that, based on current IRS rules and standards, the advice contained herein is not intended or written by the practitioner to be used and cannot be used by the taxpayer for the purpose of avoiding penalties.

MillerMusmar CPAs is an established accounting firm in Reston, Virginia. We’ve been delivering top-notch auditing, tax, and accounting services for 28 years, both locally and globally. Our unique approach combines the strengths of a mid-sized and smaller firm to provide responsive service to our clients. You can reach us at info@millermusmar.cpa