IRS Raises Standard Mileage Rates for the Rest of 2026

If you or your business track vehicle mileage for tax purposes, there's a mid-year update worth knowing about. The IRS has raised the standard mileage rates for the remainder of 2026, a rare move that hasn't happened since 2022.

What Changed

Citing a jump in fuel prices, the IRS revised the optional standard mileage rates used to calculate the deductible cost of operating a vehicle for business, medical, and moving purposes. Gas prices climbed sharply between January and July, and

the agency adjusted the rates to reflect that increase.

Effective July 1, 2026, the new rates are:

• Business use: 76 cents per mile, up from 72.5 cents

• Medical and moving purposes: 23.5 cents per mile, up from 20.5 cents

• Charitable use: stays fixed by law at 14 cents per mile (not adjusted)

Everything else about how the standard mileage rate works stays the same. This is simply a rate change, not a change to the rules around who can use it or how it's calculated.

Why a Mid-Year Change Is Unusual

The IRS typically sets mileage rates once a year, ahead of tax season, and holds them steady for the full year. A mid-year adjustment like this one signals just how much fuel costs moved in the first half of 2026. The last time the IRS made a similar mid-year adjustment was in 2022, also in response to a sharp rise in gas prices.

What This Change Means for You

Per the IRS announcement making this change (Announcement 2026-11, modifying Notice 2026-10), the split is based on when the expense was paid or incurred, not a single flat rate for the year:

• Expenses paid or incurred before July 1, 2026 use the original 2026 rate

• Expenses paid or incurred on or after July 1, 2026 use the new, higher rate

The same split applies to mileage allowances paid to employees: the rate depends on both when the allowance is paid and when the underlying transportation expense was paid or incurred, both on or after July 1 for the new rate to apply.

A Good Time to Check Your Mileage Log

If your mileage tracking has been a little loose this year, a mid-year rate change is a natural nudge to tighten it up. A simple log with date, purpose, and miles driven for each trip makes it much easier to apply the correct rate come tax time, and it's exactly the kind of documentation the IRS looks for if a deduction is ever questioned.

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HFM CPAs provides specialized accounting, tax, and assurance services to individuals and businesses across Connecticut and Rhode Island.