2026 IRS Mileage Rate Explained: 72.5¢ Per Mile and What It Means for You

On December 29, 2025, the IRS announced the 2026 standard mileage rates in Notice 2026-10. The headline number: 72.5 cents per business mile, up 2.5 cents from the 2025 rate of 70 cents. This is the highest business mileage rate in IRS history. Medical and moving rates dropped half a cent to 20.5¢/mile. The charity rate stayed at 14¢/mile, where it has been since 1998 because it is set by statute and not adjusted for inflation.

Why the 2026 rate increased

The IRS calculates the business mileage rate based on an annual study of fixed and variable vehicle ownership costs. The 2.5-cent increase reflects rising vehicle prices, higher insurance premiums, and continued maintenance cost inflation. Of the 72.5-cent rate, 35 cents represents depreciation expense (up from 33 cents in 2025). Medical and moving rates dropped slightly because they only factor in variable costs (fuel, oil), and gas prices stabilized through 2025.

What this means for your deduction

For every 1,000 business miles you drive in 2026, you can deduct $725. That is $25 more per thousand miles than 2025. A real estate agent driving 18,000 business miles deducts $13,050 in 2026 (up from $12,600 in 2025). An Uber driver logging 25,000 miles deducts $18,125 (up from $17,500). For most independent contractors, the increase translates to a few hundred extra dollars in tax savings, depending on tax bracket.

Who can use the standard mileage rate

The standard mileage rate applies to fully-electric, hybrid, gasoline, and diesel-powered cars, vans, pickups, and panel trucks. There is one critical timing rule: if you own the vehicle, you must elect the standard mileage rate in the first year you use it for business. In later years you can switch between standard mileage and actual expenses. For leased vehicles, once you choose the standard mileage rate, you must use it for the entire lease — including any renewals.

New for 2026: intelligence community moving expenses

Under the One, Big, Beautiful Bill Act (OBBBA), certain members of the intelligence community can now deduct moving expenses at the 20.5¢/mile rate, joining active-duty Armed Forces members. This expanded the moving deduction beyond what existed in previous years. For everyone else, moving expense deductions remain unavailable through 2025 under the Tax Cuts and Jobs Act.

How to apply the new rate

The 72.5¢ rate applies to miles driven on or after January 1, 2026. If your tax year straddles 2025 and 2026 (rare but possible for some fiscal-year filers), you apply each year's rate to the miles driven in that year. For most calendar-year filers, all 2026 miles get the new rate. Keep your log organized by date so you can apply rates correctly.