The 2026 IRS mileage rate: 72.5 cents through June, 76 cents from July 1

What is the IRS mileage rate for 2026?

2026 is a two rate year. The IRS set the 2026 rates in Notice 2026-10, announced December 29, 2025. Announcement 2026-11, published in the July 13, 2026 Internal Revenue Bulletin, raised the business and medical rates from July 1. The IRS gave one reason: "recent increases in the price of fuel."

The charitable rate did not move because section 170(i) of the tax code fixes it at 14 cents. The moving rate only helps active duty Armed Forces members who move under orders, and certain intelligence community members. Nobody else can deduct moving costs.

The announcement left the rest of Notice 2026-10 in place. That includes the part of the business rate treated as depreciation, 35 cents a mile for 2026, which reduces your car's basis.

Who uses these rates: self-employed people and businesses deducting car costs, and employers reimbursing employees. Employees cannot deduct unreimbursed mileage on their own return. The One Big Beautiful Bill Act (the IRS also calls it the Working Families Tax Cuts) made that disallowance permanent, with narrow exceptions such as Armed Forces reservists.

How to split a 2026 mileage log at July 1

The date you drove decides the rate. Add up business miles from January 1 to June 30 and multiply by 72.5 cents. Add up business miles from July 1 to December 31 and multiply by 76 cents. Add the two.

Say a hypothetical home inspector, a sole proprietor, drives 9,000 business miles in 2026: 4,200 through June 30 and 4,800 from July 1.

The wrong answer most people will get: 9,000 miles × 76 cents = $6,840.00. That is the rate on the IRS page today, so it is the one people grab in January. It overstates the deduction by $147.00, an amount you cannot support if the return is examined. A spreadsheet set up last January at 72.5 cents and never changed gives $6,525.00 and leaves $168.00 of deduction unclaimed.

Business parking fees and tolls go on top of the mileage amount. Parking at your regular place of work is commuting and does not count.

Reimbursing employees under an accountable plan in 2026

A mileage allowance is tax free to the employee when it is paid under an accountable plan, at or below the IRS rate. Publication 463 lists the three rules for an accountable plan:

• The expense has a business connection.
• The employee accounts for it (dates, places, business purpose and miles) within a reasonable period. Within 60 days counts.
• The employee returns any excess within a reasonable period. Within 120 days counts.

Announcement 2026-11 draws the July 1 line for allowances too. The 76 cent rate covers an allowance paid on or after July 1, 2026 for miles driven on or after July 1, 2026. Miles driven before July 1 stay at 72.5 cents, even when you pay for them in July or later.

Say a salesperson turned in a June log of 600 miles and was paid in mid-July. The IRS rate for those miles is 72.5 cents, or $435.00. Paying 76 cents ($456.00) puts $21.00 over the federal rate. Unless the employee returns it, Publication 463 says the employer reports the allowance up to the federal rate in box 12 of the W-2 under code L, and the $21.00 excess in box 1 as wages.

Nothing requires you to pay the IRS rate. A lower rate under an accountable plan is fine and stays tax free.

What records the IRS expects in a mileage log

Publication 463 says you cannot deduct amounts you approximate or estimate. For car expenses, your records need:

• The date of each business trip.
• Your business destination.
• The business purpose.
• The miles for each trip.
• Your total miles for the year, business and personal.
• The date you started using the car for business, and its cost.

Record trips at or near the time. A log you fill in each week counts as timely. A record kept on a computer counts as a written record. For 2026, add one more line: a subtotal of business miles at June 30, so the split above takes a minute in January.

Standard mileage rate or actual expenses?

With actual expenses, you deduct the business share of gas, oil, repairs, insurance, registration and depreciation or lease payments. With the standard rate, you multiply business miles by the rate and add business parking and tolls. A self-employed owner can also deduct the business share of car loan interest.

Publication 463 sets the limits on the standard rate:

• For a car you own, choose the standard rate in the first year the car is available for use in your business. After that you can switch between methods.
• For a leased car, if you choose the standard rate you must use it for the whole lease.
• You cannot use it if you run five or more cars at the same time, or after claiming Section 179, bonus depreciation or MACRS depreciation on that car.
• In a year you use the standard rate, you cannot also deduct that year's actual costs.

That last rule is where books go wrong. If you take the mileage rate, fuel and repair charges on the business card are already inside it. File them to owner's draw or a nondeductible account so your profit and loss does not count them twice. In BooksGPT, a categorization rule for each gas station you use files its charges to the account you choose. The deductions checklist covers the other car costs.

New per diem rates from October 1, 2026

Notice 2026-60 sets the 2026 to 2027 special per diem rates for travel away from home on or after October 1, 2026. Under the high-low method, the rate is $329 a day for high-cost localities and $230 everywhere else, up from $319 and $225. The meals part is $86 and $74. The transportation industry meals and incidentals rate is $80 in the continental United States and $86 outside it, and the incidental expenses only rate is $5 a day.

When will the 2027 mileage rate come out?

It is not out. The IRS standard mileage rate page, last updated July 28, 2026, lists no 2027 rate. The 2026 rate was announced on December 29, 2025, so watch for the 2027 rate near the end of this year. When it arrives, check the date it takes effect before you change your reimbursement rate.

What to do next

1. Subtotal your 2026 business miles at June 30 and at December 31.
2. Multiply each half by its own rate and add them, as in the table above.
3. Check reimbursements paid since July 1. If June miles were paid at 76 cents, ask for the excess back or report it as wages.
4. If you use the standard rate, make sure fuel and repairs are not also booked as deductible expenses.
5. Update your travel policy to the October 1 per diem rates.
6. Put a reminder in December to look for the 2027 rate. The year-end checklist has the rest of the list.