If your business involves driving, whether it is client visits, job sites, deliveries, or errands, the standard mileage rate directly affects your bottom line. And the IRS just made a mid year change you need to know about.
For business miles driven from July 1, 2026, through December 31, 2026, the standard mileage rate increased to 76 cents per mile, up from 72.5 cents per mile for the first half of the year. It is a small number on paper, but for businesses that log serious miles, it adds up quickly.
The 2026 Mileage Rates at a Glance
Because of the mid year adjustment, 2026 has two sets of rates. You must apply the rate that corresponds to when the mileage was actually driven.
January 1 through June 30, 2026
- Business: 72.5 cents per mile
- Medical and moving: 20.5 cents per mile
- Charitable: 14 cents per mile
- Business: 76 cents per mile
- Medical and moving: 23.5 cents per mile
- Charitable: 14 cents per mile
Why This Matters for Your Business
More Deductible Value Per Mile
At 76 cents per mile, every business mile is worth more as a deduction than it was earlier in the year. For a business driving 20,000 business miles in the second half of the year, that is $15,200 in deductions, compared to $14,500 at the old rate.
Accurate Reimbursements for Your Team
If you reimburse employees for using their personal vehicles, updating your reimbursement rate keeps things fair and keeps your reimbursements tax free. Reimbursing at the IRS rate under an accountable plan means the money is not treated as taxable income to your employees.
Splitting the Year Correctly
The mid year change means you cannot simply apply one rate to the whole year. Mileage driven in the first half uses the old rate, and mileage in the second half uses the new one. This makes accurate, date stamped mileage records more important than ever.
How to Capture Every Mile
Keep a Contemporaneous Log
The IRS expects mileage records kept at or near the time of the trip, not reconstructed months later. A log should include the date, destination, business purpose, and miles driven.
Use a Mileage Tracking App
Apps that automatically track and categorize trips take the guesswork out of recordkeeping and make it easy to separate first half and second half mileage.
Decide Between Standard Mileage and Actual Expenses
The standard mileage rate is one option. The other is deducting actual vehicle expenses like gas, maintenance, insurance, and depreciation. The best choice depends on your vehicle and how much you drive. This is worth reviewing with your accountant.
Reconcile Regularly
Do not wait until tax season. Reviewing mileage monthly ensures nothing slips through the cracks and gives you an accurate picture of this often overlooked deduction.
The Bottom Line
The increase to 76 cents per mile is good news for businesses that rely on driving. But capturing the full benefit depends on accurate records and applying the correct rate to the correct period.
If you are not sure whether you are tracking mileage the right way, or whether the standard rate or actual expense method is better for your situation, this is exactly the kind of detail that a proactive accounting partner helps you get right. Small deductions like this add up to real savings over the course of a year.