IRS sets 2026 business standard mileage rate at 72.5 cents per mile, up 2.5 cents

he IRS has officially released the standard mileage rates for 2026. While business users will see a slight bump in their per-mile deduction, those claiming medical or moving expenses will see a minor decrease.

Here is the breakdown of what you need to know for the upcoming year.

2026 Standard Mileage Rates

Effective January 1, 2026, the rates for cars, vans, pickups, and panel trucks (including electric, hybrid, and gas-powered vehicles) are:

Key Takeaways & Eligibility

• Intelligence Community Update: Under the "One, Big, Beautiful Bill," certain members of the intelligence community are now eligible for the moving expense deduction, joining active-duty military.
• How Rates are Set: The business rate is calculated based on both fixed and variable costs (like insurance and depreciation), while medical and moving rates focus only on variable costs (like gas and oil). The charitable rate remains frozen by statute.
• The "First Year" Rule: If you want to use the standard mileage rate for a vehicle you own, you must choose it in the first year the car is used for business. In future years, you can switch between standard and actual costs.
• Leased Vehicles: If you choose the standard mileage rate for a leased vehicle, you must stick with it for the duration of the lease.
• Itemized Deductions: Most employees cannot claim a deduction for unreimbursed travel expenses. However, exceptions remain for educators, performing artists, certain government officials, and military reservists.

The Bottom Line

While using these rates is optional—you can always choose to track and deduct actual expenses instead—they offer a simplified way to account for vehicle costs without saving every single gas receipt.