IRS Increases the Standard Mileage Rate Mid-Year: What Business Owners Need to Know

IRS Increases the Standard Mileage Rate Mid-Year: What Business Owners Need to Know

The IRS has announced a mid-year increase to the standard mileage rate for business driving. Effective July 1, 2026, the business mileage rate increased from 72.5 cents to 76 cents per mile in response to rising fuel costs. Mid-year adjustments are rare, making this an important update for taxpayers who use the standard mileage method.

What does this mean for your business?

If you deduct vehicle expenses using the standard mileage method, you'll need to separate your business mileage into two periods:

• January 1 – June 30, 2026: 72.5¢ per mile

• July 1 – December 31, 2026: 76¢ per mile

This means that one annual mileage total is no longer enough. Your mileage log should clearly identify when the miles were driven so the correct rate is applied to each period.

What about medical, moving, and charitable mileage?

While the biggest change affects business owners, the IRS also updated the rates for other types of travel:

• Medical and qualifying military moving travel: Increased from 25¢ to 26¢ per mile beginning July 1, 2026.

• Charitable service: Remains 14¢ per mile, as this rate is set by law and cannot be adjusted by the IRS.

For most taxpayers, these rates are less commonly used, but they can still provide valuable deductions in the right circumstances.

Our recommendation

Now is a great time to review your mileage tracking process. Whether you use a mileage tracking app or keep a manual log, accurate records are essential to maximizing your deduction and ensuring compliance with the new rates.

If you're unsure whether the standard mileage method or the actual expense method is the better choice for your business, we'd be happy to help you evaluate your options and make sure you're claiming every deduction you're entitled to.