The Internal Revenue Service (IRS) has announced updated standard IRS mileage rates 2026, and the changes are a mixed bag depending on why you drive. People who use their vehicles for business will benefit from a higher rate, while those driving for medical reasons or certain military moves will see a small decrease. The charitable mileage rate, however, remains unchanged.
These rates take effect on January 1, 2026, and will apply to tax returns filed in 2027.
Business Mileage Rate Rises to a Record High
Drivers who qualify for the business mileage deduction will see the biggest change. The IRS has increased the standard business mileage rate to 72.5 cents per mile, up 2.5 cents from 2025. This is the highest business mileage rate ever set by the agency.
This rate applies to cars, vans, pickup trucks, and panel trucks used for work-related travel. It is meant to help cover the everyday costs of owning and operating a vehicle when it is used for business purposes.
Medical and Moving Rates Dip Slightly
Not all mileage rates are going up.
For 2026:
- Medical travel will be reimbursed at 20.5 cents per mile, down half a cent from the previous year.
- Moving mileage for certain active-duty members of the U.S. Armed Forces and members of the intelligence community will also be 20.5 cents per mile, also down half a cent.
Most taxpayers are no longer allowed to deduct moving expenses, but this benefit still applies to military members who move under official orders.
Charitable Mileage Rate Stays the Same
Mileage driven in service of charitable organizations will continue to be reimbursed at 14 cents per mile, exactly where it has been for decades.
This rate is set by law, not by the IRS, and does not increase with inflation. In fact, it has stayed at 14 cents per mile since the late 1990s.
Do These Rates Apply Only to Gas-Powered Cars?
No. The standard mileage rates apply to all types of vehicles, including:
- Gasoline-powered cars
- Diesel vehicles
- Hybrid vehicles
- Fully electric vehicles
The IRS does not adjust the rate based on fuel type.
Why Are Business Rates Higher Than Medical or Moving Rates?
At first glance, it might seem odd that driving a mile costs more for business than for medical care or moving. After all, gas costs the same regardless of where you’re going. But the IRS calculates these rates differently.
The business mileage rate includes both:
- Fixed costs, such as depreciation, insurance, and vehicle registration
- Variable costs, such as fuel, oil, repairs, tires, and routine maintenance
On the other hand, the medical and moving rates only take variable costs into account. They do not include things like wear and tear or long-term vehicle value.
That difference explains why the business rate is much higher.
Why the Charitable Rate Never Changes
The charitable mileage rate is different because it is controlled by Congress, not the IRS. Lawmakers chose not to tie it to inflation, which is why it has remained unchanged for more than 25 years.
According to the Treasury Department, charitable mileage deductions are limited because donors are not allowed to deduct costs like depreciation, insurance, or repairs as charitable contributions. Only basic driving expenses are considered.
A Look Back: How Long Has the Mileage Rate Existed?
The standard mileage rate has been around for more than 50 years.
- It was first officially published by the IRS in 1971
- The original business rate was 10 cents per mile
When adjusted for inflation, that original 10-cent rate would be roughly $1.05 per mile today. That means the current 72.5-cent rate is actually lower than it was decades ago when measured in today’s dollars.
The mileage rate was created to make tax reporting easier. Instead of tracking every repair, oil change, and gas receipt, drivers could simply multiply miles driven by a standard number.
How the Mileage Rates Are Used
Standard mileage rates are used to calculate deductible expenses for:
- Business travel
- Medical travel
- Qualified military moving expenses
- Charitable work
The math is simple:
Miles driven × applicable mileage rate = deductible amount
You can also add related costs like parking fees and tolls.
Example: How Mileage Deductions Work
Imagine you drive 20,000 miles in 2026:
- 10,000 miles for personal use
- 2,000 miles for charity
- 8,000 miles for medical appointments
Your deductions would look like this:
- Personal miles: not deductible
- Charitable miles: 2,000 × $0.14 = $280
- Medical miles: 8,000 × $0.205 = $1,640
Your total deductible mileage would be $1,920, plus any tolls or parking fees related to those trips.
Medical mileage deductions are still subject to income limits, and charitable deductions will face new limits starting in 2026.
Choosing the Standard Rate vs. Actual Expenses
If you own your vehicle and want to use the standard mileage rate for business, you must choose that method in the first year the car is used for work. After that, you can switch between the standard rate and actual expenses.
If you lease a vehicle, you must use the standard mileage rate for the entire lease period, including renewals.
Drivers who feel the standard rate doesn’t reflect their real costs can deduct actual expenses instead—but this requires much more detailed recordkeeping.
Who Still Benefits From Mileage Deductions?
Many employees can no longer deduct unreimbursed work travel due to changes made in 2017. However:
- Self-employed individuals still benefit
- Employers rely on mileage rates for reimbursements
- Military members may deduct moving mileage
- Charitable organizations use the rate as a reimbursement guide
These rules remain unchanged under current law.
Tracking Your Mileage
Good records are essential.
If your vehicle is used only for business, you can simply record the odometer reading at the beginning and end of the year.
If you mix personal and work driving, you’ll need more detail:
- Date of each trip
- Purpose of the trip
- Starting and ending locations
- Miles driven
Mileage tracker apps make this easier, but handwritten logs are also acceptable.
Where to Find Official Details
The IRS published the official rates in Notice 2026-10, which also includes rules for employer reimbursement plans and vehicle valuation limits.
Final Reminder
These mileage rates apply to 2026 driving and will be used on tax returns filed in 2027. For returns filed in 2026, taxpayers must still use the 2025 mileage rates.
Analysis: What This Means for Taxpayers
The 2026 mileage update reflects rising vehicle ownership costs, especially for business drivers. The higher business rate will help self-employed workers, contractors, and employers who reimburse travel expenses.
The small drop in medical and military moving rates may feel frustrating, but it highlights how narrowly those rates are calculated. Since they only reflect fuel and basic costs, they don’t keep pace with overall inflation.
The charitable rate remains the biggest pain point. At 14 cents per mile, it no longer reflects real-world driving costs, which may discourage volunteers or force nonprofits to cover the difference.
Overall, the IRS mileage system remains a practical and simple option for many taxpayers—but it continues to favor business use over personal, medical, or charitable travel.
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