The IRS increased the standard business mileage rate to 76 cents per mile, effective July 1, 2026 – up 3.5 cents from the 72.5-cent rate that applied earlier in the year. The medical and moving mileage rate also rose, to 23.5 cents per mile, while the charitable mileage rate stays fixed by law at 14 cents per mile. These new rates run through December 31, 2026, and change how you should be logging and deducting vehicle expenses right now.
Midyear mileage rate changes are rare. The last one happened back in 2022. This time, rising fuel prices pushed the IRS to act before year-end instead of waiting for its usual December announcement. If you drive for business, medical care, or moving purposes, here’s exactly what shifted and what it means for your bottom line.
The Business Mileage Rate Jumped to 76 Cents
- What changed: The IRS raised the business standard mileage rate from 72.5 cents to 76 cents per mile, effective July 1, 2026.
- Who it affects: Self-employed individuals, small business owners, and gig workers who use the standard mileage method instead of tracking actual vehicle expenses.
- What to do: Split your 2026 mileage log into two periods – January 1 through June 30 at 72.5 cents, and July 1 through December 31 at 76 cents – so your deduction calculates correctly at tax time.
Columbus Note: With daily commuter traffic across I-270 and I-70, small business owners logging client visits around Central Ohio should double-check mileage app settings to reflect the new July 1 rate.
Medical and Moving Mileage Rose to 23.5 Cents
- What changed: The medical and moving mileage rate increased from 20.5 cents to 23.5 cents per mile, also effective July 1, 2026.
- Who it affects: Taxpayers who itemize and have unreimbursed medical travel expenses, plus active-duty military and intelligence community members with deductible moving expenses.
- What to do: Track medical mileage separately, but remember it’s only deductible once your total qualifying medical expenses exceed 7.5% of your adjusted gross income for the year.
The Charitable Mileage Rate Isn’t Moving
- What changed: The charitable mileage rate remains frozen at 14 cents per mile, unchanged by the midyear adjustment.
- Who it affects: Anyone who drives for volunteer work with a qualified charitable organization.
- What to do: Keep claiming 14 cents per mile for charitable driving – this rate is set by Congress, not the IRS, so it won’t move until lawmakers change the statute.
Standard Mileage vs. Actual Expenses: Which Wins?
- What changed: With the business rate now at 76 cents, some vehicle owners may find the standard mileage method more valuable than tracking actual costs.
- Who it affects: Business owners deciding how to deduct vehicle costs for a car placed in service in 2026, especially those weighing the $20,300 first-year luxury auto depreciation cap under the actual expense method.
- What to do: Run the numbers both ways before you file – once you elect standard mileage in a vehicle’s first year of business use, switching later triggers stricter depreciation rules.
Columbus Note: Local business owners with higher-mileage routes (think contractors driving between Dublin, Westerville, and downtown job sites) often come out ahead on standard mileage once the 76-cent rate is factored in.
Let Us Handle the Math
This midyear bump is good news if you drive a lot for work, but it also means your recordkeeping just got slightly more complicated for the rest of 2026. A mileage log that doesn’t clearly separate pre- and post-July 1 trips could cost you an accurate deduction, or invite IRS scrutiny.
Want help figuring out whether standard mileage or actual expenses makes more sense for your business this year? Our Tax Advisory services team can run the comparison for you. And if you’re curious how this rate change fits into the bigger 2026 tax picture, check out our related post on this year’s key tax deduction changes.
Mileage rate changes are just one piece of a much bigger tax puzzle. Our team helps Central Ohio business owners choose the right vehicle deduction strategy, stay audit-ready, and keep more of what they earn. Schedule Your Free Consultation today.
Frequently Asked Questions
What is the IRS mileage rate for the second half of 2026?
For July 1 through December 31, 2026, the IRS business mileage rate is 76 cents per mile, the medical and moving rate is 23.5 cents per mile, and the charitable rate remains 14 cents per mile.
Why did the IRS change the mileage rate in the middle of 2026?
Rising fuel prices prompted the IRS to make an unusual midyear adjustment. Rates are normally set once a year in December, but the last midyear change before this one happened in 2022 under similar fuel-cost pressure.
How do I calculate mileage deductions for a car used both before and after July 1, 2026?
Split your mileage log into two periods: multiply business miles driven January 1 through June 30 by 72.5 cents, and miles driven July 1 through December 31 by 76 cents, then add the two totals together.
Can I switch from standard mileage to actual expenses in 2026?
Yes, but only if you used standard mileage in the vehicle’s first year of business use. Switching later requires you to use straight-line depreciation going forward, which can reduce your deduction compared to accelerated methods.
Is the charitable mileage rate going up in 2026?
No. The charitable mileage rate stays at 14 cents per mile because it’s set by federal statute, not by IRS cost studies. Only an act of Congress can change it, so it hasn’t moved in years.
Who qualifies for the medical mileage deduction?
You must itemize deductions, and your total qualifying medical expenses for the year (including mileage at 23.5 cents per mile) must exceed 7.5% of your adjusted gross income before any deduction applies.
What is the luxury car depreciation limit for 2026?
The maximum first-year depreciation deduction for a passenger car placed in service in 2026 is generally $20,300, including $8,000 in bonus depreciation. A car used 90% for business would be capped at $18,270 for its first year.
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