Standard Mileage Deduction
A simplified method of deducting vehicle expenses based on business miles driven, using the IRS-published standard mileage rate.
Detailed Explanation
For 2026 the IRS set two business standard mileage rates in a rare mid-year adjustment, the first since 2022. Miles driven January 1 through June 30 are deducted at 72.5 cents per mile; miles driven July 1 through December 31 are deducted at 76 cents per mile. The medical and moving rate is 20.5 cents for the first half of the year and 23.5 cents for the second half, while the charitable rate is fixed by statute at 14 cents and never adjusts for inflation. The taxpayer multiplies business miles by the rate for the period in which those miles were actually driven. The alternative is the Actual Expense Method (gas, insurance, depreciation, repairs, prorated by business use). Once the actual method is used, the standard rate may not be used in subsequent years for that vehicle. Detailed mileage logs (date, destination, purpose, miles) are required to substantiate the deduction, and dated logs matter more than usual in a split-rate year because miles must be allocated to the correct half.
Key Points
- 2026 business standard mileage rate is split: 72.5 cents per mile for January 1 through June 30 and 76 cents per mile for July 1 through December 31.
- Alternative is the Actual Expense Method: gas, insurance, repairs, and depreciation prorated by business use.
- To use the standard rate on a vehicle, you must choose it in the first year that vehicle is placed in service.
- Commuting between home and a regular workplace is personal and not deductible.
- A contemporaneous log (date, destination, purpose, miles) is required to substantiate the deduction.
Practical Example
A self-employed photographer drives 12,000 business miles in 2026, split evenly at 6,000 miles in each half of the year. Under the standard mileage method the deduction is 6,000 x $0.725 = $4,350 for the first half plus 6,000 x $0.76 = $4,560 for the second half, or $8,910 total, plus business parking and tolls. If actual costs (gas, insurance, depreciation, repairs) on a vehicle driven 60% for business were $20,000, the actual method would yield $12,000, making it the better choice that year if records support it.
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