IRS Increases Standard Mileage Rates Effective July 1, 2026

Businesses, self-employed individuals, and taxpayers who deduct vehicle expenses should be aware of an important mid-year change from the Internal Revenue Service (IRS). Effective July 1, 2026, the IRS has increased the optional standard mileage rates in response to rising fuel costs.

Because the adjustment takes effect halfway through the year, taxpayers will need to use two different mileage rates when calculating deductible travel for 2026.

New Mileage Rates Beginning July 1, 2026

For travel occurring on or after July 1, 2026, the updated IRS standard mileage rates are:

• Business use: 76 cents per mile (previously 72.5 cents)
• Medical and qualified moving travel: 23.5 cents per mile (previously 21 cents)
• Charitable service: 14 cents per mile (no change)

Two Sets of Rates Apply in 2026

Since the increase became effective in the middle of the calendar year, mileage must be calculated using the correct rate based on when the travel occurred.

• January 1 through June 30, 2026: Use the mileage rates that were in effect at the beginning of the year.
• July 1 through December 31, 2026: Use the newly increased mileage rates.

This means taxpayers, business owners, and accounting professionals should carefully separate mileage driven before and after July 1 to ensure deductions and reimbursements are calculated accurately.

Keep Detailed Mileage Records

Maintaining complete and accurate mileage logs has always been important, but it is especially critical this year. Your records should clearly identify:

• The date of each trip
• The purpose of the trip
• The number of business, medical, moving, or charitable miles driven
• Whether the travel occurred before or after July 1, 2026

Well-maintained records can help support deductions if questions arise and make tax preparation much easier.

Employers Should Review Mileage Reimbursements

Businesses that reimburse employees for business travel under an accountable reimbursement plan should also review their policies. Vehicle expenses incurred on or after July 1, 2026, should generally be reimbursed using the new 76-cent-per-mile rate if the standard mileage method is being used.

How Pivotal Can Help

Vehicle expense deductions can become more complicated when IRS rates change during the year. If you have questions about mileage deductions, employee reimbursements, bookkeeping, or tax compliance, Pivotal Forensic Accounting & Audits can help ensure your records are accurate and your deductions are properly calculated.

Our team works with individuals and businesses to stay current with IRS changes while providing practical accounting, tax, and forensic accounting services designed to keep you compliant and financially organized.

Call for an appointment (253) 752-3920 or email us today.