IRS Announces 2026 Standard Business Mileage Rates

The IRS has increased the standard mileage rate for business use of cars, vans, and pickup or panel trucks by 2.5 cents in 2026. The rates for vehicle use for certain other purposes will decline or remain the same. ( IR 2025-128 , 12/29/2025; Notice 2026-10, 2026-04 IRB)

The standard mileage rates provide an optional method that taxpayers can use to calculate the deductible costs of operating a vehicle for business, charitable, medical, and certain moving purposes. Taxpayers can also use the actual-costs method.

2026 Standard Mileage Rates

Beginning January 1, 2026, the standard mileage rates for the use of a car, van, or pickup or panel truck will be:

• 5 cents per mile driven for business use. This is an increase of 2.5 cents from 2025.
• 5 cents per mile driven for medical purposes, down from 21 cents in 2025.
• 5 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces, down from 21 cents in 2025. This rate also applies for certain members of the intelligence community.
• 14 cents per mile driven in service of charitable organizations, unchanged from 2025.

Note. These rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.

Other Vehicle Deduction Amounts

The IRS has also provided other amounts that taxpayers use to calculate their deductible vehicle expenses in specific circumstances in 2026.

Basis reduction amount: For taxpayers calculating their basis reduction for depreciation taken under the business standard mileage rate, the portion of the business standard mileage rate treated as depreciation is 35 cents per mile.

Maximum cost under FAVR plan: The maximum standard automobile cost for computing the allowance under a fixed and variable rate (FAVR) plan is $61,700 for automobiles (including trucks and vans).

Maximum value for employer-provided vehicles: For purposes of the fleet-average valuation rule and the vehicle cents-per-mile valuation rule, the maximum fair market value for employer-provided automobiles first made available to employees for personal use in 2026 is $61,700.

Miscellaneous Itemized Deductions Under OBBBA

The notice also reminds taxpayers that the One Big Beautiful Bill Act (OBBBA) permanently suspends all miscellaneous itemized deductions that are subject to the 2% of adjusted gross income floor, including unreimbursed employee travel expenses. As a result, the business standard mileage rate can’t be used to claim an itemized deduction for unreimbursed employee travel expenses.

However, certain educator expenses are excepted. In addition, deductions for expenses that are deductible in determining adjusted gross income are still permitted.

For more on deductible vehicle expenses, see Checkpoint’s Federal Tax Coordinator.

© 2025 Thomson Reuters/Tax & Accounting. All Rights Reserved.