IRS Raises 2026 Business Mileage Rate by 2.5 Cents
The IRS has announced a significant update regarding business mileage rates for vehicles in 2026. Starting January 1, 2026, the standard mileage rate for business use will rise to 72.5 cents per mile. This marks an increase of 2.5 cents from the previous year.
Details of the Mileage Rate Increase
This increase applies to a variety of vehicles, including cars, trucks, and vans. The IRS adjusts this rate annually to reflect changes in cost and inflation.
Medical and Moving Mileage Rates
- The mileage rate for medical purposes will be 20.5 cents per mile, a decrease of half a cent from 2025.
- For active-duty members of the Armed Forces and certain intelligence community members, the rate for moving purposes is also set at 20.5 cents per mile, reflecting the same decrease.
Who Should Consider the Rate?
These mileage rates apply to all types of vehicles, including fully-electric and hybrid models, as well as traditional gas and diesel vehicles. However, the use of standard mileage rates is optional for taxpayers.
Individuals who use their vehicles for business purposes can alternatively calculate the actual costs associated with their vehicle usage. This option allows for a potentially more tailored deduction based on personal expenses, rather than the standard rate.
Conclusion
The IRS’s update regarding the 2026 business mileage rate signifies an important adjustment for businesses and individuals alike. Keeping abreast of these changes can maximize financial benefits related to vehicle use in professional settings.
