IRS Raises Standard Mileage Rates Mid-Year
New rates take effect for miles driven on or after July 1, 2026 — here’s what it means for employers and business owners.
The Internal Revenue Service (IRS) recently issued Announcement 2026-11, raising the standard mileage rates for miles driven after July 1, 2026. The IRS stated the revision was made in response to recent increases in fuel prices.
New Rates at a Glance
|
Use Type |
Rate through 6/30/26 |
Rate starting 7/1/26 |
|---|---|---|
|
Business |
72.5 cents/mile |
76 cents/mile |
|
Medical |
20.5 cents/mile |
23.5 cent/mile |
|
Charitable |
14 cents/mile |
14 cents/mile (unchanged) |
What This Means for Employers
Some employers reimburse employees for business-related driving at an amount equal to the standard mileage rate. Because the rate has increased mid-year, employers will need to raise their reimbursement amount retroactive to July 1, 2026 — which may result in additional amounts owed to employees for miles already driven since that date.
What This Means for Business Owners
This change also affects owners who use a personal vehicle for business purposes. When preparing their return, owners will need to bifurcate their mileage — separating miles driven before July 1, 2026 from miles driven on or after that date — to correctly calculate their deduction using the applicable standard mileage rate for each period.
Key Takeaway – Anyone tracking mileage for business, medical, or reimbursement purposes should split their 2026 mileage log at the July 1 cutoff to ensure the correct rate is applied to each portion of the year.
If you have any further questions about how this change affects your business or personal return, please contact your advisor.
About DSWD Advisory
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