The IRS standard mileage rate for 2026 is 72.5 cents per mile for business use, up 2.5 cents from 70 cents in 2025. The increase comes from Notice 2026-10, published December 29, 2025. Medical and military moving mileage drops to 20.5 cents, while the charitable rate holds at 14 cents. The rate applies the same way to gas, diesel, electric, and hybrid vehicles.
TL;DR
- The 2026 business mileage rate is 72.5 cents per mile (up from 70 cents in 2025); medical and moving mileage is 20.5 cents; charitable mileage stays at 14 cents.
- Most W-2 employees still cannot deduct unreimbursed mileage — that limit from the Tax Cuts and Jobs Act is now permanent under current law.
- Self-employed clients and sole proprietors must pick standard mileage or actual expenses in the vehicle's first business year, and leased vehicles must stick with one method for the whole lease term.
What is the IRS standard mileage rate for 2026?
For 2026, the IRS standard mileage rate for business use is 72.5 cents per mile, effective January 1, 2026. That is a 2.5-cent increase over the 70-cent rate that applied throughout 2025, and it's the figure most self-employed clients, freelancers, and small-business owners will use to deduct vehicle costs on Schedule C or Form 2106 where it still applies.
The IRS sets this rate every year based on a study of fixed and variable vehicle operating costs — fuel, maintenance, insurance, depreciation, and similar expenses. According to the IRS's own 2026 mileage rate notice, the depreciation component baked into the 72.5-cent rate is 35 cents per mile, up from 33 cents in 2025. If a client buys a vehicle that costs more than $61,700 when it's first made available for personal use in 2026, the cents-per-mile valuation rule for employer-provided vehicles doesn't apply — that's the new maximum fair market value threshold for the year.
How much did the medical and moving mileage rate change for 2026?
Medical mileage and military moving mileage both drop to 20.5 cents per mile for 2026, down a half-cent from 21 cents in 2025. The charitable mileage rate, which Congress sets by statute rather than the IRS adjusting it annually, stays unchanged at 14 cents per mile.
Moving mileage is now almost entirely irrelevant outside one narrow group. Under current law, only active-duty members of the Armed Forces moving under orders, plus certain members of the intelligence community, can deduct moving expenses at all. Everyone else lost that deduction permanently under the Tax Cuts and Jobs Act, and nothing in recent legislation brought it back for the general population.
| Purpose | 2026 rate | 2025 rate | Change |
|---|---|---|---|
| Business use | 72.5 cents | 70 cents | +2.5 cents |
| Medical purposes | 20.5 cents | 21 cents | -0.5 cents |
| Active-duty military moving | 20.5 cents | 21 cents | -0.5 cents |
| Charitable purposes | 14 cents | 14 cents | No change |
Can W-2 employees still deduct mileage in 2026?
No, almost none can. Unreimbursed employee travel expenses, including mileage, remain non-deductible as a miscellaneous itemized deduction for the vast majority of W-2 workers, and that suspension is now permanent under current tax law rather than set to expire.
A small list of exceptions still applies: certain educators, qualified reservists, performing artists meeting specific income limits, and fee-based government officials. If your client doesn't fall into one of those buckets and gets a W-2, mileage they drive for their employer simply isn't deductible on their personal return — even at 72.5 cents per mile. The fix, where it's available, is for the employer to set up an accountable reimbursement plan instead of relying on the employee to claim a deduction that no longer exists. This is also worth flagging during year-end planning conversations alongside other changes like 100% bonus depreciation rules for 2026, since vehicle deductions often get bundled into the same client conversation.
Standard mileage rate vs actual expenses: which should your clients use?
The standard mileage rate is usually faster and requires less recordkeeping, while the actual expense method can produce a bigger deduction for vehicles with high loan interest, lease payments, or heavy depreciation. The right answer depends on the vehicle, how it's financed, and how diligent the client is about saving receipts.
| Factor | Standard mileage rate (72.5 cents) | Actual expenses |
|---|---|---|
| Recordkeeping burden | Low — just a mileage log | High — every receipt, every category |
| Best for | Newer, fuel-efficient, lower-cost vehicles | Expensive vehicles, high finance charges, heavy business use |
| First-year rule | Must elect in the vehicle's first business year to keep this option open later | Locks the client out of switching to standard mileage for that vehicle |
| Leased vehicles | Must be used for the entire lease term, including renewals | Allowed, but no switching mid-lease |
| Depreciation | Built into the rate (35 cents/mile for 2026) | Calculated separately, often with bonus depreciation |
For clients leasing or financing a higher-cost vehicle, run both methods at least once before locking in a choice. The gap between the two can be meaningful, and the IRS won't let a client retroactively switch once they've picked one for a given vehicle.
What records does the IRS require to back up a mileage deduction?
The IRS requires a contemporaneous mileage log showing the date of each trip, the destination, the business purpose, and the number of miles driven. "Contemporaneous" means recorded close to when the trip happened, not reconstructed from memory months later during tax season.
A log built in March for trips from the prior January doesn't hold up well under an audit, even if the mileage figure turns out to be accurate. The IRS's own guidance on business use of a car spells out that the taxpayer carries the burden of proof, so a client with a year-end estimate and no log is in a much weaker position than one with a running app-based record. This is one of the easiest things to fix before filing season gets busy, and it's worth a quick reminder email to clients every January when the rate changes.
How can your firm apply the 2026 rate without redoing every spreadsheet by hand?
Most firms still update mileage worksheets, client letters, and tax software defaults manually every time the IRS changes the rate, which eats an afternoon across a busy season that doesn't need more afternoons lost. The actual fix isn't a bigger spreadsheet — it's removing the manual update step entirely.
AI assistants can also cut the time your staff spends collecting and processing client vehicle information at intake. Instead of emailing a client to ask whether they bought a new vehicle, what the purchase date was, and whether they want to elect standard mileage, a tool like Typeform paired with an AI assistant such as Claude can send a structured intake form, read the responses, flag the first-year election question automatically, and drop a completed summary into your workflow — before anyone on your team touches the file. For a firm handling 80 vehicle-deduction clients, that kind of intake automation can recover two to three hours per week during filing season alone.
If you're not sure where mileage-rate updates, client reminder letters, and document chasing rank against everything else eating your team's week, a free CloseRadar operations audit will name the specific tools that fit your firm and how many hours each one gives back, based on a short questionnaire rather than a sales call. For a broader look at what else is worth automating first, see which accounting tasks to automate first.
What should your firm do this week with the 2026 mileage rate?
Update every client-facing template, engagement letter, and internal worksheet that still references 70 cents per mile before the first 2026 returns or quarterly estimates go out. A handful of small, quick moves now prevents a wave of corrected documents in March.
- Update mileage rate references in client letters, organizer templates, and any internal tax-prep checklists.
- Send a short reminder to self-employed and rental-property clients about contemporaneous mileage logs, especially anyone still tracking miles on paper.
- Flag any client who switched vehicles in 2026 to confirm whether they elected standard mileage or actual expenses in that vehicle's first year of business use.
- Review leased-vehicle clients to confirm they're using the same method consistently across the lease term.
- If first-quarter 2026 estimates are coming up, double-check the dates against the 2026 estimated tax due dates so mileage-related adjustments land on the right voucher.
If your firm is also weighing which practice-management or AI tools are worth adopting this year, this roundup of AI tools for accountants and this list of operations audit questions are good next stops.