Earlier this year, the IRS established the 2026 standard business mileage rate at 72.5 cents per mile, effective January 1, 2026. Due to rising fuel costs, the IRS has since issued a mid-year adjustment, increasing the rate to 76 cents per mile for business miles driven on or after July 1, 2026.
What This Means for Businesses
Businesses that reimburse employees using the IRS standard mileage rate should review their reimbursement policies and payroll systems to ensure they reflect the updated rate.
Because the change is effective mid-year, organizations should separately track business mileage driven during the following periods:
- January 1, 2026 – June 30, 2026: 72.5 cents per mile
- July 1, 2026 – December 31, 2026: 76 cents per mile
Maintaining separate mileage totals for each period will help ensure reimbursements are calculated accurately and simplify year-end recordkeeping.
For Self-Employed Taxpayers
Self-employed individuals who use the IRS standard mileage method to calculate deductible business vehicle expenses should also maintain separate mileage records for the first and second halves of 2026. Accurate mileage logs remain essential to substantiate business deductions.
Other 2026 IRS Standard Mileage Rates
While the July 1 adjustment applies only to the business mileage rate, the IRS also established the following mileage rates, effective July 1, 2026:
- 23.5 cents per mile driven for qualified medical purposes (up from 20.5 cents per mile for the first half of 2026)
- 23.5 cents per mile driven for qualified moving expenses for certain active-duty members of the U.S. Armed Forces and certain members of the intelligence community (up from 20.5 cents per mile for the first half of 2026)
- 14 cents per mile driven in service of qualified charitable organizations, unchanged from the first half of 2026.
Taxpayers should maintain accurate mileage logs throughout the year to support any reimbursement requests or tax deductions for which they qualify.
Need Assistance?
If you have questions about how this change affects your business, employee reimbursement policy, or tax reporting, our team is here to help. We can assist you in determining the appropriate reimbursement method and ensuring your records comply with the latest IRS guidance.
For additional information, see the IRS bulletin 2026-29 (see Part IV)
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