The IRS sets standard mileage rates each year so taxpayers can deduct vehicle costs without tracking every fuel receipt. For 2026, IRS Notice 2026-10 raised the business rate to 72.5 cents per mile, up 2.5 cents from 2025, reflecting higher average vehicle ownership and operating costs.
What Are the 2026 IRS Standard Mileage Rates?
IRS Notice 2026-10 establishes three rates based on driving purpose:
- Business use: 72.5 cents per mile (up from 70 cents in 2025)
- Medical and military moving: 20.5 cents per mile (down slightly from 2025)
- Charitable driving: 14 cents per mile (unchanged, fixed by statute under IRC Section 170(i))
The business and medical rates adjust annually based on a study of fixed and variable vehicle costs. The charitable rate is set by Congress and rarely changes.
Who Can Deduct Business Mileage in 2026?
The business rate applies to self-employed individuals, not employees:
- Self-employed individuals on Schedule C (freelancers, consultants, rideshare drivers)
- Real estate investors and landlords on Schedule E
- Farmers on Schedule F
- Single-member LLC owners treated as sole proprietors
Employees cannot deduct unreimbursed mileage. TCJA eliminated the employee business expense deduction for 2018 through 2025, and OBBBA made that elimination permanent. If you drive for work as a W-2 employee, ask your employer for reimbursement through an accountable plan instead.
Standard Mileage vs. Actual Expense Method
Two methods exist for deducting business vehicle costs. The method you choose in the first year you place a vehicle in business service generally locks in your approach for that vehicle.
Standard Mileage Method
Multiply business miles driven by 72.5 cents. The rate covers fuel, depreciation, insurance, and repairs. You still deduct parking fees and tolls separately. Requires only a mileage log, not receipts for individual vehicle expenses. Best for high-mileage drivers with average-cost vehicles.
Actual Expense Method
Deduct actual costs of gas, insurance, repairs, registration, and depreciation (via MACRS or Section 179), multiplied by your business-use percentage. More documentation required, but often produces a larger deduction for expensive vehicles or vehicles with high operating costs relative to miles driven.
What Counts as a Business Mile?
Qualifying business miles include driving between two work locations, traveling to meet clients, visiting job sites, and going to business-related appointments. Commuting between home and your regular workplace is never deductible, even if you make work calls during the commute.
A useful rule: if you have a qualifying home office under IRC Section 280A, driving from home to a client's location is a business mile, not a commute.
Mileage Log Requirements
The IRS requires a contemporaneous log under Treasury Reg. Section 1.274-5T. Each entry must show:
- Date of the trip
- Business destination (address or city)
- Business purpose
- Miles driven
Apps such as MileIQ and Everlance track mileage automatically via GPS and generate IRS-ready reports. Manual logs in a notebook or spreadsheet also work. Reconstructed logs created at year-end from memory carry higher audit risk.
Medical and Charitable Mileage
Medical mileage (20.5 cents/mile): Deductible on Schedule A for driving to receive medical care, pick up prescriptions, or visit a provider. You must itemize deductions, and total medical expenses must exceed 7.5% of AGI before any benefit applies.
Charitable mileage (14 cents/mile): Deductible on Schedule A when you drive to perform services for a qualifying 501(c)(3) organization. You must itemize to claim this deduction.
Need help choosing the right vehicle deduction method or setting up a mileage tracking system? Contact TS CPA for a free consultation. We respond within the same day.