July 2026 | IRS Increases Optional Standard Mileage Rate for Remainder of 2026

The IRS has announced an increase in the optional standard mileage rate for the remainder of 2026. Optional standard mileage rates are used by employees, self‑employed individuals, and other taxpayers to compute the deductible costs of operating automobiles (including vans, pickups, and panel trucks) for business, medical, moving, and charitable purposes.

For January 1 through June 30, 2026, the standard mileage rate for business use was 72.5 cents per mile. Effective July 1, 2026, the IRS has increased the business rate to 76 cents per mile. The revised standard mileage rates for the second half of 2026 are:

• 76 cents per mile for business use

• 23.5 cents per mile for medical purposes, and moving purposes (only for active-duty military)

• 14 cents per mile for charitable uses (unchanged)

These revised rates apply to deductible transportation expenses paid or incurred on or after July 1, 2026. Practically, this means there are two business mileage rates for 2026: 72.5 cents per mile for qualifying business miles driven from January 1 through June 30, and 76 cents per mile for qualifying business miles driven from July 1 through December 31. The new rate does not retroactively replace the earlier rate; you must use the rate in effect at the time the mileage was driven.

For medical and moving mileage, the IRS rate for the first half of 2026 was 20.5 cents per mile, before increasing to 23.5 cents per mile beginning July 1.

Because of this mid‑year change, it’s especially important to keep detailed mileage logs that clearly separate trips taken before and after July 1. Accurate records help ensure that deductions and reimbursements are calculated correctly and that your business remains compliant with IRS rules.

For more information, please contact one of the experienced tax professionals at Bormel, Grice & Huyett, P.A. at 301-953-3259 to make sure your business is protected and compliant.