2026 has two business mileage rates, not one. Miles driven January 1 through June 30, 2026 are deducted at 72.5 cents per mile. Miles driven on or after July 1, 2026 are deducted at 76 cents per mile. If you have been running one number for the whole year, your log is understating your deduction.
The 2026 rates
The IRS set the 2026 rates in Notice 2026-10, then modified them mid-year in Announcement 2026-11 (Internal Revenue Bulletin 2026-29). The new rates apply to transportation expenses paid or incurred on or after July 1, 2026.
| Purpose | Jan 1 – Jun 30, 2026 | On or after Jul 1, 2026 |
|---|---|---|
| Business | 72.5¢ per mile | 76¢ per mile |
| Medical (and moving, for those who still qualify) | 20.5¢ per mile | 23.5¢ per mile |
| Charitable | 14¢ per mile | 14¢ per mile |
The charitable rate is fixed by statute, so it does not move with the others.
Two things about that middle row. The medical rate is available to any taxpayer with deductible medical expenses under section 213, not just to military families. The moving rate is far narrower: it applies only to taxpayers covered by section 217(g), meaning active-duty Armed Forces members moving under permanent change of station orders and, for moves after December 31, 2025, certain members of the intelligence community added by section 70113(b) of the OBBBA.
The business rate covers gas, oil, tires, maintenance, repairs, insurance, registration, and depreciation. It applies to a car, van, pickup, or panel truck, whether you own or lease it, and whether it runs on gasoline, diesel, electricity, or a hybrid drivetrain. Fuel type does not matter.
For context, the business rate was 56 cents in 2021, 58.5 cents for the first half of 2022 and 62.5 cents for the second half, 65.5 cents in 2023, 67 cents in 2024, and 70 cents in 2025. That is a 20-cent increase since 2021. Note that 2022 was also a split-rate year. Mid-year changes are not unheard of.
What it is worth
Say you are a real estate agent in Orlando who drives 18,400 business miles in 2026, split evenly across the July 1 change.
- 9,200 miles × $0.725 = $6,670
- 9,200 miles × $0.76 = $6,992
- Deduction: $13,662
At a 24% marginal federal rate, that is about $3,279 of income tax. As a Schedule C filer you also save self-employment tax, but not 15.3% of the full deduction. SE tax is computed on 92.35% of net earnings, so the SE saving is roughly $1,930, and because half of SE tax is itself deductible, saving SE tax pushes about $965 back into taxable income and costs about $232 at 24%. Net benefit: roughly $4,980.
Two caveats. Above the 2026 Social Security wage base of $184,500, only the 2.9% Medicare portion applies, which shrinks the SE tax half of that math dramatically. And if you claim the qualified business income deduction, a lower profit means a smaller QBI deduction, which trims the benefit further. Use your actual miles per period, not a 50/50 assumption.
Which miles count
Deductible: driving to clients, between two business locations, to the bank or supply house, to conferences and business meetings, and from a qualifying home office to a work site.
Not deductible: commuting. Driving from home to your regular place of business is personal, no matter how far it is. The exception matters in Florida, where a lot of owners work from home: if your home is your principal place of business, trips from home to other business locations are business miles.
If a vehicle does double duty, deduct only the business-use percentage. That means you have to track personal miles too, because you cannot compute a percentage without the denominator.
When you cannot use the standard rate at all
This is the part most articles skip, and it disqualifies a real share of owners.
Under Publication 463, you cannot use the standard mileage rate for a vehicle if you:
- use five or more cars at the same time (a fleet rule that catches trades, delivery, and home service businesses running several vans)
- claimed MACRS depreciation on the car
- claimed a Section 179 deduction on the car
- claimed the special depreciation allowance (bonus) on the car
- claimed depreciation by any method other than straight line
- claimed actual car expenses after 1997 on a car you leased
Items two through four are the normal result of buying a vehicle and expensing it. If that is you, the standard rate is off the table for that vehicle permanently. Claiming it anyway invites full disallowance on exam.
Standard mileage vs. actual expenses
| Standard mileage | Actual expenses | |
|---|---|---|
| What you track | Date, destination, purpose, miles | Every vehicle receipt, plus a mileage log |
| Usually better for | High-mileage, fuel-efficient, or older vehicles | Low-mileage, expensive, or newly purchased vehicles |
| Depreciation | Built in (35¢ per mile for 2026, which reduces your basis) | Claimed separately under MACRS, Section 179, or bonus |
| Switching later | Elect it in year one and you may switch to actual later, using straight line over the remaining useful life | Use accelerated depreciation in year one and you can never switch to standard for that vehicle |
| Leased vehicles | Locks you in for the entire lease, including renewals | Bars the standard rate for that lease permanently |
You cannot use both methods for the same car in the same year. You can use different methods for different cars, as long as you are not running five or more at once.
The practical rule: for a vehicle's first year in business use, elect standard mileage if you want to keep your options open. That election is close to irreversible in one direction only.
What you can deduct on top of the standard rate
The rate is not all-inclusive. Separately deductible are business parking fees and tolls, the business-use share of car loan interest (self-employed filers only, not employees), and state or local personal property tax on the vehicle. Keep those receipts apart from your mileage log.
If you buy the vehicle
Passenger automobiles are subject to the Section 280F depreciation caps. Rev. Proc. 2026-15 sets the 2026 first-year cap at $20,300 with bonus depreciation and $12,300 without, then $19,800 in year two, $11,900 in year three, and $7,160 per year after that. Confirm the current table before you file.
Two nuances. The weight test is not one test: passenger cars are measured on unloaded gross vehicle weight of 6,000 pounds or less, while trucks, vans, and SUVs are measured on gross vehicle weight rating. And a heavy SUV escaping the 280F caps does not mean unlimited. Section 179(b)(5)(A) separately caps SUV expensing at $32,000 for tax years beginning in 2026.
Records that hold up
Section 274(d) requires, for each trip, the mileage, the date, the place, and the business purpose. A log written at or near the time of the trip is the standard you want. A reconstructed log is not automatically thrown out, since the regulations allow your own statement plus corroborating evidence, but it is much weaker and often fails.
Odometer readings at the start and end of the year are best practice, not a statutory requirement. Keep them anyway, because they prove the total-miles denominator behind your business-use percentage. Schedule C Part IV and Form 4562 Part V ask for total, business, and commuting miles and the date the vehicle was placed in service.
A notebook works. A spreadsheet works. An app such as MileIQ, Everlance, TripLog, or the mileage feature in QuickBooks works better because it timestamps entries automatically. Whatever you use, keep it backed up somewhere other than the phone in your truck. Hurricane season is a bad time to discover your only copy of a year's substantiation was sitting in an office that flooded.
The Florida and entity angle
Florida has no personal income tax, so for a sole proprietor, partner, or S corporation shareholder the mileage deduction works entirely at the federal level. There is no state add-back, no separate state depreciation schedule, nothing to reconcile.
That is not true for everyone. Florida does impose a corporate income tax, and section 220.13(1)(e), F.S. requires an add-back of federal bonus depreciation with a subtraction spread over seven years. Florida has not conformed to the OBBBA's permanent 100% bonus. If you file Form F-1120 and use the actual expense method with bonus depreciation, you have a state-level complication.
If you are a W-2 employee, you cannot deduct unreimbursed business mileage at all. Section 70110 of the OBBBA made the disallowance of miscellaneous itemized deductions permanent. Narrow exceptions survive for Armed Forces reservists, fee-basis state and local government officials, and certain performing artists. Everyone else should be reimbursed by their employer instead.
That last point matters if you are a founder who formed a U.S. company. If you operate through a C corporation or an LLC taxed as a corporation, the mileage belongs to the company, not to you personally. Set up an accountable plan so the company reimburses your business miles at the standard rate. Done correctly, the reimbursement is deductible to the company and not taxable income to you. Without an accountable plan, the payment is compensation and the deduction is lost on your side.
One more Florida detail for buyers: sales tax on a vehicle purchase, which is 6% state plus a county discretionary surtax that applies only to the first portion of the price and varies by county, is added to your basis in the vehicle. It is not a separate deduction.
What to do next
- Split your 2026 mileage log at June 30. Two subtotals, two rates.
- Check whether you are even eligible for the standard rate. If you took Section 179, bonus, or MACRS on the vehicle, you are on actual expenses for its life. If you run five or more vehicles at once, the standard rate is out.
- Log every trip with date, destination, purpose, and miles, at the time you drive it.
- Track personal and commuting miles so your business-use percentage is defensible.
- Keep parking, tolls, loan interest, and property tax records separately. Those come on top of the standard rate.
- Track the 35-cent-per-mile basis reduction if you use standard mileage, because it affects your gain when you sell the vehicle.
- Run both methods before you file, and factor the result into your remaining 2026 estimated payments (September 15, 2026 and January 15, 2027).
If you are choosing a method for a vehicle you just put into service, get the first-year election right. That one decision follows the vehicle for as long as you own it. Accounting BOSS works with owners in Orlando, Jacksonville, and Miami, and with founders running U.S. entities from abroad, to run both calculations side by side and set up tracking that stands up to review.
This is general information, not tax advice for your situation, and reading it does not make you a client. Rules and figures change — verify anything time-sensitive before you act on it. We'll talk it through with you free.
Common questions
Both. Miles driven January 1 through June 30, 2026 use 72.5 cents per mile. Miles driven on or after July 1, 2026 use 76 cents per mile. Announcement 2026-11 modified the original Notice 2026-10 rate mid-year, so your 2026 log needs two subtotals and two calculations. Using 72.5 cents for the whole year understates your deduction by 3.5 cents on every mile driven in the second half.
Probably not. Publication 463 bars the standard mileage rate for any vehicle where you claimed MACRS depreciation, a Section 179 deduction, bonus depreciation, or depreciation by any method other than straight line. Most people using actual expenses did at least one of those, which disqualifies that vehicle permanently. The switch only works in the other direction: elect standard mileage in year one, then move to actual expenses later using straight line over the remaining useful life.
No. That is commuting, and it is personal no matter how far you drive. The exception is if your home is your principal place of business. Then trips from home to client sites, job sites, and other business locations are deductible business miles. If you rely on that exception, make sure your home office actually qualifies, because the whole chain of deductions rests on it.
No, and this is money people leave on the table. Business parking fees and tolls are deductible in addition to the standard mileage rate. So is the business-use share of car loan interest if you are self-employed, and state or local personal property tax on the vehicle. Keep those receipts in a separate pile from your mileage log.
You can try, but expect a fight. Section 274(d) wants the mileage, date, place, and business purpose for each trip, recorded at or near the time of the trip. The regulations do allow substantiation by your own statement plus corroborating evidence such as calendar entries, client records, or job tickets, so a reconstruction is not automatically disallowed. It is much weaker than a contemporaneous log and it often fails. Start tracking today rather than rebuilding in April.
Yes. No state personal income tax means the deduction works purely at the federal level with no state add-back or separate depreciation schedule to reconcile, which is simpler than most states. But Florida does have a corporate income tax, and it requires an add-back of federal bonus depreciation with a seven-year spread. If you file Form F-1120 and use the actual expense method with bonus depreciation, you do have a state-level item to handle.