IRS Issues Standard Mileage Rates for 2026

The IRS has announced the 2026 optional standard mileage rates for calculating deductible costs when operating a vehicle for business, charitable, medical, or moving purposes.

Applicable to various vehicles, including electric, hybrid-electric, gasoline, and diesel-powered models, these updated rates are in effect beginning January 1, 2026:

• 72.5 cents per mile for business use, an increase of 2.5 cents from 2025.
• 20.5 cents per mile for medical purposes or relocation for qualified active duty Armed Forces and intelligence community members. This rate is down a half cent from last year.
• 14 cents per mile for service to charitable organizations, a statutorily set rate that remains unchanged from 2025.

Under current tax law, unreimbursed employee travel expenses are generally no longer deductible as miscellaneous itemized deductions, except in limited circumstances. Certain expenses that are deductible in calculating adjusted gross income may still be allowed, including those incurred by eligible educators, qualifying members of a reserve component of the Armed Forces, specific state and local government officials, and certain performing artists. Eligible educators may also be able to claim an itemized deduction for qualifying unreimbursed travel expenses. Separately, deductions for moving expenses are limited to active-duty military members and certain intelligence community employees who relocate pursuant to a permanent change of station.

When it comes to vehicle expenses, taxpayers may choose between using the standard mileage rate or calculating actual vehicle costs. The standard mileage rate is optional, and taxpayers are not required to use it if they prefer to track actual expenses.

However, timing matters. For a vehicle that a taxpayer owns and uses for business, the standard mileage rate must be elected in the first year the vehicle is available for business use. In subsequent years, the taxpayer may choose between the standard mileage rate and actual expenses. For leased vehicles, once the standard mileage rate is selected, it must be used for the entire lease term, including any renewal periods.

For more detailed information, refer to Notice-2026-10, which outlines the 2026 standard mileage rates and provides more details about using the standard mileage rates. If you have questions about how these updates may affect your tax situation or need guidance on the most beneficial approach for your vehicle expenses, contact your CRI advisor. We’re here to help you make informed financial decisions every step of the way.