IRS Mileage Rates for 2026: The Complete Guide for Business Owners

Key Takeaways

• 2026 Business Rate: 72.5 cents per mile (up 2.5 cents from 2025)
• 2026 Medical/Moving Rate: 20.5 cents per mile (down 0.5 cents from 2025)
• 2026 Charity Rate: 14 cents per mile (unchanged)
• Effective January 1, 2026 through December 31, 2026
• You can’t claim both standard mileage AND actual expenses for the same vehicle

If you drive your car for business, charity work, or medical appointments, the IRS mileage rate directly affects your tax deduction. Get it right and you reduce your taxable income. Get it wrong and you leave money on the table.

The IRS announced the 2026 standard mileage rates on December 29, 2025. The business rate increased to 72.5 cents per mile. That’s a 2.5-cent bump from 2025. For someone driving 15,000 business miles per year, that’s an extra $375 in deductions.

This guide covers everything you need to know: current rates, historical data, qualifying trips, recordkeeping requirements, and the most common mistakes that get deductions disallowed.

2026 IRS Standard Mileage Rates

Here are the official rates effective January 1, 2026:

The business rate reflects updated costs for fuel, maintenance, depreciation, and insurance. The charity rate is set by statute, which is why it rarely changes.

These rates apply to all vehicle types: gasoline, diesel, hybrid, and fully electric vehicles.

Historical IRS Mileage Rates (2011-2026)

Business owners often need historical rates for amended returns or prior-year calculations. Here’s the complete reference:

Note: Mid-year adjustments (2011, 2022) are rare. The IRS only changes rates mid-year when fuel costs shift dramatically. Most years use a single rate throughout.

What Are IRS Mileage Rates?

The IRS sets standard mileage rates so you don’t have to track every gas receipt, oil change, and tire rotation. Instead of calculating actual vehicle costs, you multiply your qualifying miles by the standard rate.

Three categories of mileage qualify for deductions:

Business Use covers miles driven for work activities. Client meetings. Job site travel. Bank runs. Supply pickups. Conferences. If it’s for your business and not your daily commute, it likely qualifies.

Charitable Use covers volunteer driving for qualified 501(c)(3) organizations. Delivering meals. Transporting supplies. Driving to volunteer events.

Medical or Military Moving covers travel to medical appointments or relocations for active-duty military members with permanent change of station orders.

Important: You can choose between the standard mileage rate OR actual expenses. Not both. For the same vehicle in the same tax year, pick one method and stick with it.

Why Mileage Rates Change Each Year

The IRS doesn’t guess at these numbers. They conduct an annual study analyzing:

• Fuel prices (the obvious one)
• Maintenance and repair costs (parts, labor, service intervals)
• Vehicle depreciation (how fast cars lose value)
• Insurance costs (premiums, coverage requirements)
• Registration fees (varies by state)

The 2026 increase of 2.5 cents reflects higher overall vehicle operating costs compared to 2025. Fuel prices stabilized, but maintenance and insurance costs continued climbing.

The charity rate stays at 14 cents because Congress sets it by law. It hasn’t changed in over a decade.

Business Mileage: How to Maximize Your Deduction

If you’re self-employed or run a small business, business mileage is one of your biggest potential deductions. At 72.5 cents per mile, 20,000 annual business miles equals $14,500 in deductions.

What Counts as Business Mileage

These trips qualify:

• Driving to meet clients (not your regular office)
• Traveling between job sites
• Running business errands (bank, post office, supplies)
• Attending conferences, trade shows, or professional events
• Visiting vendors or suppliers
• Property inspections (for real estate investors)

What Does NOT Count

• Commuting from home to your regular workplace. This is personal mileage. Always.
• Personal errands during work hours. Picking up dry cleaning on the way to a client? That detour is personal.
• Trips where you’re reimbursed. If your employer pays you back, you can’t also deduct it.

Home office exception: If you have a qualified home office, your first trip to a client or work location IS deductible. Your home becomes your principal place of business.

Standard Mileage vs. Actual Expenses

You have two options for deducting vehicle costs:

Standard Mileage Rate (72.5 cents/mile in 2026)

• Simple: just track miles
• Good for fuel-efficient vehicles
• Good for high-mileage drivers

Actual Expense Method

• Track gas, oil, repairs, insurance, registration, depreciation
• Calculate business-use percentage
• Good for expensive vehicles or low mileage

Example: You drive 10,000 business miles in a vehicle used 60% for business.

• Standard method: 10,000 x $0.725 = $7,250 deduction
• Actual method: $15,000 total vehicle costs x 60% = $9,000 deduction

In this case, actual expenses win. But actual expenses require more recordkeeping. Most small business owners find the standard rate simpler and sufficient.

Restriction: If you use the standard mileage rate in the first year you use a car for business, you can switch to actual expenses later. But if you start with actual expenses (and claim depreciation), you’re locked into actual expenses for that vehicle forever.

Vehicles Over 6,000 lbs: Section 179 Considerations

If you’re considering a truck, SUV, or van over 6,000 pounds GVWR, you have a decision to make. The Section 179 deduction allows you to write off the full purchase price of qualifying vehicles in year one.

But here’s the catch: if you take Section 179, you cannot use the standard mileage rate for that vehicle. Ever.

For a $70,000 heavy SUV used 100% for business, Section 179 gives you a $70,000 first-year deduction. The standard mileage rate on 20,000 miles gives you $14,500.

The math usually favors Section 179 for expensive vehicles used heavily for business. But consult with your CPA before committing.

See our complete list of vehicles over 6,000 lbs that qualify for Section 179.

Mileage for Charity Use

If you volunteer for a qualified 501(c)(3) organization, you can deduct 14 cents per mile for driving related to your volunteer work.

Qualifying Trips

• Delivering meals for food banks
• Transporting supplies to charity events
• Driving other volunteers to service locations
• Picking up donations

What Doesn’t Qualify

• Driving to receive charitable services yourself
• Volunteering for political organizations (not 501(c)(3))
• Any trip where you were reimbursed

The charity rate is low compared to business mileage. But it adds up. Someone driving 3,000 charity miles per year gets a $420 deduction.

Medical and Military Moving Mileage

The 2026 rate for medical and military moving mileage is 20.5 cents per mile.

Medical Mileage

You can deduct mileage driven for medical care if you itemize deductions on Schedule A. Qualifying trips include:

• Doctor and specialist appointments
• Hospital visits
• Physical therapy
• Lab work
• Picking up prescriptions (debatable; check with your CPA)

Medical expenses must exceed 7.5% of your adjusted gross income before you can deduct anything. For most people, this threshold is difficult to reach.

Military Moving Mileage

Active-duty military members who relocate due to permanent change of station orders can deduct unreimbursed moving mileage. This includes:

• Driving your vehicle to your new duty station
• Miles driven to transport household goods

Keep copies of your orders. The IRS will want documentation showing the move was military-mandated.

Recordkeeping: The Make-or-Break Factor

Your mileage deduction is only as good as your records. The IRS requires “contemporaneous” documentation. That means logging trips when they happen, not reconstructing them in April.

What to Track for Every Trip

1. Date of the trip
2. Starting odometer reading
3. Ending odometer reading
4. Total miles driven
5. Business purpose (be specific: “Met with client John Smith at his office” not “business”)
6. Destination

Three Ways to Track Mileage

Mileage Tracking App (Recommended)

• Automatic GPS tracking
• Categorizes trips as business/personal
• Generates IRS-compliant reports
• Examples: MileIQ, Everlance, Stride

See our mileage tracker guide for app recommendations.

Spreadsheet

• Manual entry of odometer readings
• Free
• Works if you’re disciplined
• Easy to forget entries

Paper Log

• Old school notebook in your car
• Acceptable to the IRS
• Risk of loss or damage

Whatever method you choose, consistency matters. A mileage log with gaps looks suspicious during an audit.

What Happens Without Good Records?

The IRS disallows deductions. Partially or entirely.

If you claim 15,000 business miles but can only document 8,000, you lose the deduction on 7,000 miles. At 72.5 cents, that’s $5,075 in lost deductions, plus potential penalties and interest.

Common Mileage Deduction Mistakes

1. Claiming Commuting Miles

Driving from home to your regular office is commuting. It’s never deductible, even if you answer work calls in the car.

Exception: If you have a qualified home office, trips from home to work locations are deductible.

2. Mixing Standard Mileage and Actual Expenses

Pick one method per vehicle per year. You can’t claim 72.5 cents per mile AND deduct gas receipts.

3. Rounding Miles Too Conveniently

A mileage log showing 50, 50, 50, 50 miles every week looks fabricated. Real driving produces irregular numbers. 47, 52, 48, 53 looks authentic.

4. Using Last Year’s Rate

2025 rate was 70 cents. 2026 rate is 72.5 cents. Using the wrong rate means either overstating or understating your deduction.

5. Forgetting Mid-Year Rate Changes

In 2022, the IRS changed rates mid-year. If you drove January through June at one rate and July through December at another, you need to calculate each period separately.

No mid-year change is expected for 2026, but always verify with the IRS website.

6. Not Separating Personal and Business Use

Same car, different purposes. Track them separately. A good mileage app handles this automatically by letting you swipe trips into categories.

FAQs: IRS Mileage Rate 2026

What is the IRS mileage rate for 2026?

The 2026 IRS standard mileage rate is 72.5 cents per mile for business use, 14 cents per mile for charity, and 20.5 cents per mile for medical or military moving purposes. These rates are effective January 1, 2026 through December 31, 2026.

When did the 2026 mileage rate become effective?

The 2026 rates took effect January 1, 2026 and continue through December 31, 2026 unless the IRS announces a mid-year adjustment (rare).

Can I switch between standard mileage and actual expenses mid-year?

No. For a specific vehicle in a specific tax year, you must use one method consistently. You can switch methods in future years, but only if you didn’t claim depreciation on the vehicle.

Why is the charity rate so much lower than business?

The charity rate (14 cents) is set by Congress through legislation. The business rate is calculated annually by the IRS based on actual vehicle operating costs. Changing the charity rate requires an act of Congress.

Can I deduct my commute from home to work?

No. Commuting is personal travel and never deductible. However, if you have a qualified home office, your home becomes your principal place of business, and travel from home to clients or job sites IS deductible.

What if I forgot to track my mileage?

Reconstructed mileage logs are allowed but risky. The IRS prefers contemporaneous records (logged when trips happen). If audited, reconstructed logs face more scrutiny. Some people use Google Maps Timeline or calendar entries to reconstruct business trips, but this is a backup plan, not a strategy.

Do I need a special app to track mileage?

No. A paper log or spreadsheet works fine if you’re consistent. Apps are convenient because they automate tracking and generate reports. But the IRS cares about accurate records, not the format.

How does mileage relate to Section 179 for heavy vehicles?

If you claim Section 179 on a vehicle, you must use the actual expense method for all future years. You cannot use the standard mileage rate on a Section 179 vehicle.

S-Corp and Self-Employment Considerations

If you’re structured as an S-Corp or sole proprietor, mileage deductions work slightly differently.

Sole Proprietors and Single-Member LLCs: Deduct mileage on Schedule C. The deduction reduces self-employment income, which also reduces your self-employment tax.

S-Corp Owners: Two options:

1. The S-Corp reimburses you under an accountable plan (tax-free to you, deductible to the corp)
2. You deduct unreimbursed employee expenses (limited since TCJA)

The accountable plan approach is usually better. Your S-Corp deducts the reimbursement as a business expense, and you receive the money tax-free.

This is one of those situations where entity structure affects how you handle common deductions. A quick conversation with your CPA can clarify the best approach.

Get Your Mileage Deduction Right

At 72.5 cents per mile, the 2026 IRS mileage rate offers meaningful tax savings for business owners who drive regularly. But the deduction only works if you document it properly.

Start tracking now. Use an app if you can. Keep records current. And if you’re unsure whether the standard rate or actual expenses works better for your situation, ask your CPA to run the numbers.

Questions about mileage deductions or business tax planning? Schedule a consultation with our team. We’ll analyze your situation and make sure you’re capturing every deduction you’re entitled to.

Related Resources

• Mileage Tracker Apps Compared
• Section 179 Deduction Guide
• Vehicles Over 6,000 lbs for Section 179
• Small Business Tax Deductions
• Independent Contractor Tax Guide
• Business Entity Tax Guide
• S-Corporation Tax Guide
• Best Expense Management Software

Published: January 2026 | Last Updated: January 19, 2026

SDO CPA is an AICPA member firm specializing in strategic tax planning for small businesses, partnerships, and S-Corps.