The IRS mileage allowance is the simplest way to convert your car usage into a real deduction. In 2026, it has a peculiarity that will cost many people money: it changed mid-year. Anyone who applies only one rate for the entire twelve months will file incorrectly, and the difference isn't negligible. Here are the official figures, how they work, and what your record needs to be accurate to ensure the deduction holds.
What is the IRS per-mile rate in 2026?
The IRS published two tiers for this year:
- 76 cents per business mile from July 1 to December 31, 2026.
- 72.5 cents per business mile from January 1 to June 30, 2026.
- 23.5 cents per medical or military moving mile in the second half of the year (20.5 cents in the first half).
- 14 cents per mile in service to a charity, throughout the year.
The figures are published on the IRS's official standard mileage rates page . For comparison: in 2025 the business rate was 70 cents.
How much is that worth in real money?
Ten thousand business miles driven between July and December are worth $7,600 in deductions. The same ten thousand miles at the 2025 rate would have been worth $7,000. And if you inadvertently apply 76 cents per mile to miles driven from January to June, you're inflating the deduction by 3.5 cents per mile: over 10,000 miles in the first half of the year, that's $350 that you're not entitled to and that, if the IRS reviews it, you'll have to pay back with interest.
This deduction reduces your net business income, and with it, your self-employment tax. That's why the IRS mileage allowance is often one of the most profitable deductions for those who sell, deliver, visit clients, or provide home services.
Which trips count and which don't?
Business-purpose driving includes: visiting a client, purchasing inventory, going to the bank for business matters, moving between two work locations, attending training related to your activity.
The commute between your home and your usual place of work doesn't count. That daily commute is considered personal by the IRS, no matter how early you leave. If you work from home and your home is your primary office, the situation changes: trips from there to clients usually qualify.
The 4 pieces of information your record should have
Without registration, there's no deduction, no matter how real the miles are. Each trip requires:
- Date From the trip.
- Miles tours.
- Destination.
- Reason business processes.
It's also a good idea to record the odometer reading on January 1st and December 31st. A notebook in the glove compartment will do; a trip-tracking app is even better. What won't work is trying to reconstruct the year from memory in April: that's exactly the kind of record that will fail an inspection.
Standard rate or actual expenses: which is better
You have two options. The standard rate multiplies miles by cents and that's it. The actual expenses method adds up gas, insurance, maintenance, tires, depreciation, and other costs, and deducts the percentage of business use.
The standard rate is almost always more advantageous for economical cars with high mileage. Actual expenses can be more advantageous for expensive, fuel-guzzling vehicles or those requiring significant repairs. There's an important rule of thumb: if you want to use the standard rate for your own car, it's best to start using it from the first year you use it for business. Changing the rate later has restrictions.
Whichever method you use, the result will be included in your business tax return. If you're still unsure how to prepare that return, review how to pay your business taxes and the general guide to business taxes in the USA.
An example with numbers for the whole year
Carlos runs an installation service and drives to see clients. His log for the year shows 6,000 business miles between January and June, and 7,500 between July and December.
The calculation is done in stages: 6,000 × $0.725 = $4,350 . Then 7,500 × $0.76 = $5,700 . Total deduction for the year: $10,050.
If Carlos had applied the 76-cent rate to the 13,500 miles, he would have reported $10,260: two hundred and ten dollars more than he should have. And if he had used the old 70-cent rate for the entire year, he would have reported $9,450 and given away $600 in deductions. Both mistakes are equally common; only one of them will get you in trouble with the IRS.
The IRS mileage rate when you have employees
If your business reimburses employees for miles, the standard rate also serves as a reference. Under an accountability plan—where the employee documents the date, miles, destination, and reason for the trip, and returns any excess—the reimbursement up to the IRS rate is not considered salary: it doesn't go on the W-2 or incur payroll taxes. Anything you pay above that rate is taxable income for the employee.
For the business, the difference is straightforward: a well-documented reimbursement is a clear deductible expense; an improvised one becomes unreported salary. The same principle applies to other business expenses, which is why it's advisable to have the process documented before hiring the first person.
Costly mistakes
- Use a single rate for all of 2026. Son dos tramos. Sepáralos.
- Count the journey from home to work. Is personal.
- Mix personal miles. Only business use is deductible.
- Deduct miles and also gasoline. The standard rate already includes fuel, maintenance, insurance, and depreciation.
- Do not set aside the tax money. The deduction lowers what you owe, it doesn't eliminate it; estimated payments They keep winning.
FAQ
Does the IRS per-mile rate apply if my business is an LLC?
Yes. What changes is where it's reported, depending on how your company is taxed. Our comparison of LLC vs Corporation Explain those differences.
Can I deduct miles if I use the family car?
Yes, as long as you separate business use from personal use and have it registered.
Are Google Maps screenshots valid as a record?
They help as backup, but the record must be yours, continuous, and with all four pieces of information.
What if I rented the vehicle?
You can use the standard rate, but if you choose it you must keep it for the entire lease period.
Do Uber miles or delivery miles count?
Yes, miles earned while working count as business miles, with the same registration requirement.
Can I deduct tolls and parking in addition to mileage?
Yes. Tolls and parking related to business trips are deducted separately because the standard rate doesn't include them. What you can't add separately are gasoline, insurance, maintenance, or depreciation.
What if I forgot to record some trips?
Reconstruct what you can with real evidence—calendar dates, customer invoices, receipts—and only write down what you can substantiate. Inventing miles to round up the figure is the fastest way to lose the entire deduction in an audit.
Conclusion
The IRS's per-mile rate rewards those who keep track. 76 cents per mile since July, 72.5 cents before July, and a record of four data points per trip: that's all you need to avoid leaving money on the table or getting caught out during an audit.
Not sure if the standard rate or the actual costs are right for you? Let's talk and calculate it based on your figures.
