People who use their personal vehicles for work will be able to deduct more per mile on their federal income taxes in 2026, according to new guidance released by the Internal Revenue Service.
Beginning Jan. 1, the standard mileage rate for business driving will increase to 72.5 cents per mile, up 2.5 cents from the rate in 2025. The IRS said the change reflects updated cost data and annual inflation adjustments.
The standard mileage rate is an IRS-set figure used to calculate the deductible costs of operating a personal vehicle for business purposes. It is commonly used by self-employed individuals, freelancers, gig workers and small business owners who rely on personal vehicles for work-related travel.
The IRS also sets mileage rates for other purposes. For 2026, the rate for vehicles used for medical purposes or for qualifying moving expenses by certain active-duty members of the Armed Forces and the intelligence community will be 20.5 cents per mile, a decrease of half a cent from the previous year. The rate for charitable driving will remain unchanged at 14 cents per mile.
The mileage rates apply to cars, vans, pickup trucks and panel trucks, regardless of whether they are powered by gasoline, diesel, hybrid or fully electric systems.
According to the IRS, the business mileage rate is based on both fixed and variable vehicle costs, including fuel, maintenance and depreciation. The medical and moving rate, by contrast, reflects only variable costs that increase with driving, such as fuel and routine maintenance. The charitable rate is set by federal law and does not change annually.
Taxpayers are not required to use the standard mileage rate. The IRS allows individuals to deduct actual vehicle expenses instead, provided they maintain detailed records. However, taxpayers who lease a vehicle must use the standard mileage rate for the entire lease period, including any renewals.
The updated rates will apply to miles driven starting Jan. 1, 2026, and will be used when filing federal income tax returns next year.
