Handbook / Business deductions

The 2026 standard mileage rate: two business rates and how to use them

Tax-year note: Tax information on this page applies to the 2026 tax year (returns filed in 2027), from IRS pages checked in November 2026. Figures and dates are labelled with their tax year where they appear. Check current IRS pages before you rely on them.

If you drive your own car for your business, the standard mileage rate is the simplest way to turn those miles into a deduction: multiply business miles by a rate the IRS publishes. The 2026 tax year has a twist. The IRS published one business rate for the first half of the year and a higher one for the second half. All figures on this page are for the 2026 tax year and come from the IRS standard mileage rates table and news release, checked in November 2026.

The 2026 rates

From the IRS table of mileage rates:

• January 1 to June 30, 2026: 72.5 cents per business mile. Charity 14 cents, medical and military moving 20.5 cents. Source: IR-2025-128.
• July 1 to December 31, 2026: 76 cents per business mile. Charity 14 cents, medical and military moving 23.5 cents. Source: IR-2026-29.

For comparison, the same table lists 70 cents per mile for business use in 2025.

The January release says the business rate is based on an annual study of the fixed and variable costs of operating an automobile, and that the rates apply to fully electric and hybrid vehicles as well as gasoline and diesel ones.

Working out your 2026 figure

Because the rate changed mid-year, you need two subtotals. Here is an example with invented mileage:

1. Business miles January 1 to June 30, 2026: 4,200.
2. Business miles July 1 to December 31, 2026: 3,800.
3. First half: 4,200 × $0.725 = $3,045.00.
4. Second half: 3,800 × $0.76 = $2,888.00.
5. Total standard mileage amount: $5,933.00.

If you had used a single rate for the whole year, you would have the wrong figure either way. A log that records the date of every trip makes the split trivial.

The first-year rule

Using the standard rate is optional. The IRS says taxpayers may instead calculate the actual costs of using their vehicle. But the choice has a timing rule:

• Owned vehicle. You must choose the standard mileage rate in the first year the car is available for business use. In later years you can choose either the standard rate or actual expenses.
• Leased vehicle. If you use the standard rate, you must use it for the entire lease period, including renewals.

The Schedule C instructions add related conditions, for example that you must use actual expenses if you used five or more vehicles at the same time in your business.

This makes the first year of business driving an important decision. If you use actual expenses in year one for a car you own, you lose the option of switching to the standard rate for that car later.

What counts as business miles

Not every drive related to work qualifies. The Schedule C instructions explain that in most cases commuting is travel between your home and a work location, and commuting miles are not business miles. They then list conditions where travel is treated as deductible business travel, including some trips to temporary work locations.

Typical business trips for self-employed people include driving between client sites, to pick up supplies for a job, or to a meeting with a client. Typical non-business trips include personal errands combined into the same day; only the business portion counts.

Keeping a log that holds up

Schedule C Part IV asks whether you have evidence to support your vehicle deduction and whether that evidence is written. A usable log records, for each business trip:

• the date
• where you went and why (client or job name)
• the miles driven

Many people also record the odometer reading at the start and end of the year, which gives a total-miles figure to compare business miles against.

A practical habit: Log trips the same day, by phone or notebook. Reconstructing six months of driving in April is slow and usually incomplete.

Calendar entries, invoices and map history can help fill gaps, but they work best as a cross-check rather than a substitute for a contemporaneous log.

Standard rate or actual expenses?

Actual expenses mean tracking the real costs of the car, such as fuel, repairs, insurance and depreciation, and deducting the business-use share. It can produce a larger or smaller deduction than the standard rate depending on the vehicle and how much you drive. It also takes more record keeping. Because of the first-year rule, it is worth running both numbers before you commit for a new business vehicle, and asking a tax professional if the difference is large.

Where it goes

On Schedule C, car and truck expenses go on line 9, with vehicle details in Part IV. For 2026, the one extra step is splitting your business miles at June 30 and applying the right rate to each half.