IRS Announces Midyear Increase to Business and Medical Mileage Rates

The IRS has announced a midyear increase to the standard mileage rates for business and qualifying medical travel, effective July 1, 2026. The adjustment comes in response to rising fuel costs, making this the first midyear change to the standard mileage rates since 2022.

The business mileage rate has increased from 72.5 cents per mile to 76 cents per mile, an increase of 3.5 cents per mile. The new rate applies to all qualifying business miles driven on or after July 1, 2026, while business miles driven before that date must continue to be calculated using the previous rate of 72.5 cents per mile.

For businesses that use the standard mileage method rather than tracking actual vehicle expenses, the higher rate may provide a larger deduction for qualifying business travel during the second half of the year.

The IRS has also increased the medical mileage rate from 20.5 cents per mile to 23.5 cents per mile, effective July 1, 2026. Taxpayers who itemize deductions may be able to include qualifying medical mileage as part of their deductible medical expenses, subject to the applicable IRS limitations.

Because the rates changed in the middle of the year, it is especially important to maintain accurate mileage records. Taxpayers should keep a detailed mileage log that includes the date of travel, destination, business or medical purpose, and the number of miles driven. Good recordkeeping helps ensure you receive the proper deduction and provides the documentation needed if the IRS requests support for your mileage deduction.

Whether you use a mileage tracking app, a spreadsheet, or another recordkeeping method, maintaining consistent records throughout the year can make tax preparation easier and help maximize the deductions you are entitled to claim.

If you have questions about how these updated mileage rates may affect your tax situation or whether the standard mileage method or the actual expense method is the better choice for your business, our team is here to help. Please contact our office to discuss your specific situation.

This post is for general informational purposes only and does not constitute tax, legal, or financial advice.