What Is the IRS Mileage Rate for 2026?

IRS mileage rate 2026

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The IRS announced the original 2026 standard mileage rates on December 29, 2025, then revised the business, medical, and moving rates mid-year due to rising fuel prices. Both sets apply to gasoline, diesel, hybrid, and fully electric vehicles (cars, vans, pickups, and panel trucks).

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Here’s the breakdown for 2026:

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These rates are based on an annual study of the fixed and variable costs of operating a vehicle. For business use, the rate covers everything from fuel and maintenance to insurance and depreciation.

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The IRS typically releases updated mileage rates at the very end of December, just before the new year begins, so employers can apply the new rate starting January 1.

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What changed from 2025?

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Business mileage saw the biggest move. It rose from 70 cents per mile in 2025 to 72.5 cents at the start of 2026, then again to 76 cents on July 1 — a 6-cent increase over the year. The January bump reflected higher vehicle ownership, insurance, and maintenance costs; the mid-year revision was tied to rising fuel prices.

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Medical and moving mileage took a different path. It dipped to 20.5 cents in the first half of 2026 (down from 21 cents in 2025), then climbed to 23.5 cents on July 1 — ending the year higher than where it started.

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The charitable rate is the exception. It's fixed by federal law (§170(i)) and has stayed at 14 cents per mile since 1998, so it doesn't move with either the annual or mid-year IRS updates.

If you're curious how the rate has evolved over time, check out the historical IRS mileage rates to see the trend.

Is there a mileage limit in 2026?

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There is no mileage cap for business deductions or reimbursements. 

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A common misconception is that there is a maximum number of miles you can reimburse in a single year. The IRS doesn't limit how many miles you can reimburse, as long as:

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• The miles are business-related
• They are properly documented
• They are reasonable for the work being done

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Whether an account manager drives 2,000 miles or 20,000 miles for work, the applicable rate for that period applies to every single one of them.

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What happens if mileage isn’t tracked?

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Keep in mind that the IRS doesn't accept estimates or ballpark figures. While the IRS mileage rate is optional for employers, mileage must be properly documented to be deductible. 

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Here’s what happens if you fail to track the mileage:

1. Deductions can be denied

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If you’re a business owner claiming a tax deduction or an employee seeking a tax-free reimbursement, the IRS requires a detailed log of your driving. This means you must record the:

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• Date of each trip
• Starting point and destination
• Business purpose
• Miles driven

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Without this documentation, the IRS may reject your deductions during an audit. This is why many companies are moving away from manual logs and tracking business mileage on iPhone or Android devices using automated software. 

2. Reimbursements can be questioned

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For employers, weak mileage records can raise red flags. Without clear records showing when and where miles were driven, that money becomes taxable income. So instead of getting reimbursed tax-free, you’re now paying taxes on what would have been a simple business expense.

3. Manual logs lead to mileage padding

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Manual logs often result in "mileage padding" or employees adding extra miles to their work expense reports. A few extra miles here and there adds up fast, and suddenly you're overpaying for trips.

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That's where automatic mileage tracking comes in. Tools like Timeero log trips in the background using GPS, so your team doesn't have to remember to write anything down. You get accurate records, and your employees get reimbursed fairly without the admin work.

See the real cost of manual mileage tracking

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Overreported miles, missed deductions, increased payroll time, and back-and-forth with employees all come with a cost. Most businesses don’t notice it because it leaks out slowly.

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If you're still using paper logs or spreadsheets, now's a good time to rethink that. Automatic mileage tracking saves time, reduces errors, and keeps you audit-ready without the hassle.

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See how much you can save when switching to automatic mileage tracking with Timeero's ROI calculator.

FAQs

Will mileage increase in 2026?

Yes. The business mileage rate increased from 70¢ per mile in 2025 to 72.5¢ at the start of 2026, then rose again to 76¢ per mile starting July 1, 2026.

Is mileage tracking required?

Yes. To claim a tax deduction or receive tax-free reimbursement, the IRS requires a detailed and accurate log of all business miles.

Can employers choose a different rate?

Yes. Employers can choose to pay a lower rate, a flat car allowance, or reimburse actual expenses. However, the IRS rate is the most common benchmark for simplicity and tax benefits. 

Is the IRS mileage rate mandatory?

No, it is an optional standard. Taxpayers always have the choice to track their "actual expenses" (gas, repairs, etc.) instead of using the standard rate, though the standard rate is much simpler to manage.

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Did the IRS change the mileage rate again in 2026?

‍Yes. The IRS revised the 2026 business rate from 72.5 cents to 76 cents per mile, effective July 1, along with a matching increase in the medical and moving rate. The charitable rate is unchanged.

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