Rising gas prices have prompted the IRS to do something it rarely does: change the IRS standard mileage rate in the middle of the year. Effective July 1, 2026, the optional standard mileage rate for business use of a vehicle increased from 72.5 cents to 76 cents per mile. The rate for medical and moving purposes rose from 20.5 cents to 23.5 cents per mile.
The IRS made the change in Announcement 2026-11, which modified Notice 2026-10, citing the sharp increase in fuel costs. According to AAA, the average price of regular gasoline climbed from $2.819 per gallon on January 8 to $3.890 on July 15 — a 38% jump. Mid-year adjustments like this are unusual; the last one was in 2022.
The rate for miles driven in service of charitable organizations remains 14 cents per mile, since that rate is fixed by statute and doesn't change with fuel prices.
2026 IRS Standard Mileage Rate Breakdown
| Purpose |
Jan. 1 – June 30, 2026 |
July 1 – Dec. 31, 2026 |
| Business |
72.5 cents per mile |
76 cents per mile |
| Medical / Moving |
20.5 cents per mile |
23.5 cents per mile |
| Charitable |
14 cents per mile |
14 cents per mile (fixed by statute) |
What This Means for Your Recordkeeping
Here's the practical catch: because the rate changed mid-year, your 2026 mileage can't simply be totaled up at year-end and multiplied by a single rate. You'll need two separate totals — one for miles driven from January 1 through June 30, and another for miles driven from July 1 through December 31. Each total gets its own rate.
If you keep a mileage log (and you should — the IRS requires contemporaneous records to support the deduction), make sure your entries are dated so the miles can be split cleanly at the June 30 / July 1 line. If you use a mileage-tracking app, most will handle the split automatically, but it's worth confirming that the app has updated its rates.
Employers who reimburse employees at the IRS standard mileage rate should also update their reimbursement rate as of July 1. Reimbursements at or below the IRS rate are generally tax-free to the employee when properly substantiated, so paying the old rate for second-half miles leaves money on the table, while paying above the new rate can create taxable income.
The Bottom Line
The higher rates are good news for anyone deducting or being reimbursed for vehicle expenses in the second half of 2026 — but only if your records support the split. Keep your mileage separated by half-year, and if you have questions about how the change affects your deduction or your company's reimbursement policy, reach out to us. We're happy to help.
