Tax update
IRS raises 2026 business mileage rate to 76 cents for the second half
The optional business rate is 76 cents per mile from July through December. Some medical and moving rates also rose.
Photo by Downtowngal · CC BY-SA 3.0
What changed on July 1
IRS Announcement 2026-11 sets the optional business rate at 76 cents per mile. It applies to eligible trips from July 1 through December 31, 2026. The old rate of 72.5 cents still applies to eligible trips from January through June.
The medical and eligible moving rate rose from 20.5 cents to 23.5 cents for the second half. The charity rate stays at 14 cents per mile.
Who may use the rates
The IRS calls these optional rates. They may help some people report car costs or mileage. The rules depend on the driver, the trip, the car, and how costs are reported.
Only some moves qualify. Many workers cannot deduct a normal commute or work miles that no one paid back. Personal trips do not become tax costs just because a rate exists.
Keep the two 2026 periods separate
- Log the date, place, miles, and valid purpose for each trip.
- Use the first rate for eligible January-June miles. Use the new rate for eligible July-December miles.
- Keep the receipts and records needed for the method you use.
How this fits a vehicle budget
Do not treat 76 cents as a car's true cost per mile or resale value. Add up the price, loan cost, loss in value, fuel, insurance, repairs, and taxes on their own. Ask a tax expert which method fits your case.
Primary references
Official sources
MyFavi links to the original agency material so you can verify the details and check for updates.
This article gives general facts, not tax advice. The rules can vary. Check current IRS guidance and ask a tax expert about your case.