The Internal Revenue Service has released the optional standard mileage rates for 2026. These rates, used to calculate deductible costs for operating a vehicle, reflect updated inflation data and shifting operational costs.
Starting January 1, 2026, the new rates will apply to electric, hybrid, gasoline, and diesel-powered vehicles (including cars, vans, pickups, and panel trucks).
2026 Rate Summary
| Category | 2026 Rate (per mile) | Change from 2025 |
| Business Use | 72.5 cents | Up 2.5 cents |
| Medical Purposes | 20.5 cents | Down 0.5 cents |
| Moving (Military/Intel) | 20.5 cents | Down 0.5 cents |
| Charitable Service | 14 cents | No change |
Key Policy Updates
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Intelligence Community Inclusion: Under the “One, Big, Beautiful Bill,” the moving expense deduction—previously reserved for active-duty Armed Forces members—is now extended to certain members of the intelligence community relocating under official orders.
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Variable vs. Fixed Costs: The business rate is determined by an annual study of both fixed and variable costs. In contrast, medical and moving rates are calculated based strictly on variable costs. The charitable rate remains fixed by statute at 14 cents.
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Deduction Limits: Generally, taxpayers cannot claim miscellaneous itemized deductions for unreimbursed employee travel. Exceptions remain for eligible educators, performing artists, certain government officials, and military reservists.
Guidelines for Taxpayers
While using these standard rates is optional, the IRS maintains specific rules for those who choose them over calculating actual vehicle expenses:
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Ownership: If you own the vehicle, you must choose the standard mileage rate in the first year it is used for business to remain eligible for that method in future years.
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Leasing: For leased vehicles, if the standard mileage rate is chosen, it must be used for the entire duration of the lease and any renewals.
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Alternative Method: Taxpayers always have the option to track and deduct actual expenses (such as fuel, repairs, and insurance) instead of using the standard rates.
Full details, including maximum automobile costs for reimbursement plans and employer-provided vehicle valuations, can be found in Notice-2026-10.
