IRS Mileage Rate 2026: Two Rates, One Year
The 2026 business standard mileage rate is 72.5 cents per mile for January 1 through June 30, and 76 cents per mile for July 1 through December 31. The IRS raised it mid-year, so 2026 has two business rates rather than one.
That split is not a rounding detail. Twelve thousand miles spread evenly across the year deducts $8,910 rather than the $8,700 a single-rate calculation produces — $210 that a flat annual multiplication silently loses.
How it's calculated
The standard mileage rate is the IRS's per-mile stand-in for what driving actually costs. It is built to cover fuel, insurance, maintenance, tyres, registration, and depreciation in one figure, so you can deduct business driving without tracking every receipt.
For 2026 there are three rates, and each has a first-half and second-half figure except the charitable rate:
Business driving is 72.5 cents a mile from January 1 through June 30, and 76 cents from July 1 through December 31. Medical and qualified military moving mileage is 20.5 cents in the first half and 23.5 cents in the second. The charitable rate stays at 14 cents all year, because it is fixed in statute rather than adjusted for costs — which is why it has not moved in decades while the business rate has climbed.
Mid-year changes are unusual but not unprecedented; the IRS makes them when fuel costs move sharply enough that a single annual figure would misstate the real cost of driving. The practical consequence is that your mileage log needs dates, not just a total. A year-end odometer difference cannot be split across the two periods, and "about half in each" is not a record.
The way to apply it is to total your business miles for each period separately and multiply each by its own rate. Eight thousand miles before July and ten thousand after is 8,000 × 72.5¢ plus 10,000 × 76¢, or $13,400 — a blended 74.4 cents. The calculator above does exactly this, and it also shows the tax the deduction saves, which for a self-employed filer is considerably more than the income-tax figure alone.
That last point is the one most often missed. A business mileage deduction reduces Schedule C net profit, and net profit is the base for both income tax and self-employment tax. So the deduction saves your marginal income-tax rate plus the 14.13% effective self-employment rate — 26.13% for someone in the 12% bracket, not 12%. Employees, by contrast, generally cannot deduct unreimbursed business mileage at all under current law, which is why this matters far more to a contractor than to a salaried worker. If your employer pays you back for business miles instead, the mileage reimbursement calculator works out what you are owed at these rates.
Whichever rate applies, the substantiation requirement does not change: a contemporaneous log of dates, miles, destinations, and business purpose, and commuting between home and a regular workplace never counts.
A worked example
A contractor drives 12,000 business miles evenly across 2026 — 6,000 in each half. The first 6,000 deducts at 72.5 cents for $4,350; the second 6,000 deducts at 76 cents for $4,560.
The total is $8,910, a blended 74.25 cents per mile. Multiplying all 12,000 miles by the January rate would have produced $8,700, understating the deduction by $210.
In the 12% bracket, that $8,910 deduction saves $1,069 of income tax and $1,259 of self-employment tax — $2,328 in total, a combined 26.13% return on a figure most drivers treat as a bookkeeping chore.
Common mistakes to avoid
- Multiplying total annual miles by one rate. 2026 has two business rates, and a single multiplication is wrong for anyone who drove in both halves of the year.
- Keeping only a year-end odometer total. Without dated entries there is no way to split miles between the 72.5¢ and 76¢ periods, and no way to substantiate the deduction on audit.
- Using the business rate for charitable driving. Volunteer mileage is 14 cents per mile, fixed by statute — roughly a fifth of the business rate.
- Deducting gas and repairs on top of the standard rate. The rate already includes fuel, insurance, maintenance, and depreciation; claiming them separately is double-counting.
- Assuming employees can deduct mileage. Unreimbursed employee business expenses are generally not deductible under current law — this deduction is for the self-employed.
Frequently asked questions
What is the IRS mileage rate for 2026?
72.5 cents per business mile for miles driven January 1 through June 30, 2026, and 76 cents per business mile from July 1 through December 31. Medical and qualified military moving mileage is 20.5 cents in the first half and 23.5 cents in the second. The charitable rate is 14 cents throughout, because Congress sets it by statute rather than adjusting it for costs. See the medical, charity and moving mileage rates for 2026 for who can deduct each.
Why did the IRS change the mileage rate mid-year?
Because vehicle operating costs, fuel in particular, moved enough during the year that the January figure no longer reflected what driving actually cost. The IRS occasionally makes mid-year adjustments for exactly this reason. The practical effect for filers is that a single annual mileage total is no longer enough — you need dated records so miles can be assigned to the right period.
How do I split my miles between the two 2026 rates?
Total the business miles you drove January 1 through June 30 and multiply by 72.5 cents, then total the miles from July 1 through December 31 and multiply by 76 cents, and add the two. This requires a dated log rather than a year-end odometer reading. If you use a mileage-tracking app, export the year and filter by date; the split is straightforward from trip-level records and impossible without them.
How much is the 2026 mileage deduction worth in tax?
For a self-employed filer, roughly your marginal income-tax rate plus 14.13%, because the deduction reduces the profit both income tax and self-employment tax are calculated on. Someone in the 12% bracket saves 26.13% of the deduction; someone in the 22% bracket saves 36.13%. An $8,910 deduction is therefore worth about $2,328 in the 12% bracket — roughly double what an income-tax-only estimate suggests.
Can employees deduct mileage in 2026?
Generally no. Unreimbursed employee business expenses, including mileage, are not deductible for most employees under current law. The standard mileage rate matters mainly to self-employed filers reporting on Schedule C, and to employers reimbursing employees — a reimbursement at or below the standard rate under an accountable plan is generally not taxable to the employee.
Are employers required to pay the IRS standard mileage rate?
No general federal law requires a private employer to pay the Internal Revenue Service (IRS) standard mileage rate to W-2 employees. Under the Fair Labor Standards Act (FLSA), required vehicle costs cannot push a worker's weekly pay below the federal minimum wage of $7.25 per hour. State rules can also require reimbursement. California Labor Code Section 2802, for example, requires employers to reimburse employees for necessary vehicle costs. These rules are covered under state mileage reimbursement laws. Many employers adopt the IRS rate for convenience. You can calculate your expected payout with a mileage reimbursement calculator.
Is my mileage reimbursement from my employer taxable?
Mileage reimbursement is not taxable if your employer pays it under an accountable plan at or below the IRS standard mileage rate. An accountable plan requires a business connection, timely substantiation of dates and miles, and the return of any excess reimbursement. If your employer pays more than the IRS rate, generally only the excess amount is taxed as wages on Form W-2. Under a non-accountable plan, the full reimbursement is taxed as ordinary income.
What was the standard mileage rate for 2025?
The IRS business standard mileage rate was 70 cents per mile for all of 2025. Calendar year 2026 features two separate rates, setting 72.5 cents for January 1 to June 30 and 76 cents for July 1 to December 31. In contrast, 2025 maintained a single 70-cent rate across the entire year. Filers completing a late or amended 2025 return must calculate their business deduction using that 70-cent figure instead of either 2026 rate. For every year back to 2010, see the IRS mileage rate history by year.
Does the IRS mileage rate change if I drive an electric or hybrid vehicle?
No, the IRS standard mileage rate applies equally whether you drive a gasoline, diesel, hybrid, or all-electric vehicle. The 2026 business rates of 72.5 cents per mile from January 1 to June 30 and 76 cents per mile from July 1 to December 31 apply to electric and hybrid cars without adjustment. The IRS uses one blended figure to cover fuel, maintenance, insurance, and depreciation across all vehicle types, so no separate EV deduction exists.
Sources
We prioritize primary sources for rules, formulas, rates, limits, and definitions. See our calculator methodology and editorial policy.