Did the IRS Increase the 2026 Standard Mileage Rate to 72.5 Cents? Key Tax Savings for Self-Employed & Freelancers
“Wondering what the IRS standard mileage rate is for 2026 — and how it actually affects your tax deduction if you’re self-employed or freelancing?”
The IRS has officially released the standard mileage rates effective January 1, 2026.
From an Enrolled Agent’s perspective, this guide breaks down what changed, why it matters, and how independent workers can use the new rate to reduce taxable income.
- Business mileage: 72.5¢ per mile (↑ 2.5¢ from 2025)
- Medical & moving mileage: 20.5¢ per mile (↓ 0.5¢)
- Charitable mileage: 14¢ per mile (no change)
Figures based on official IRS announcements.
1️⃣ 2026 IRS Standard Mileage Rates at a Glance
| Purpose | 2026 Rate | Change vs 2025 |
|---|---|---|
| Business | 72.5¢ / mile | ⬆️ +2.5¢ |
| Medical / Moving | 20.5¢ / mile | ⬇️ -0.5¢ |
| Charitable | 14¢ / mile | ➡️ No change |
The business mileage rate was formally confirmed through IRS Notice 2026-10 and IRS News Release IR-2025-128.
2️⃣ How the IRS Determines Mileage Rates
Each year, the IRS recalculates mileage rates based on a combination of fixed vehicle costs (depreciation, insurance) and variable costs (fuel, maintenance, repairs).
Recent increases in insurance premiums and vehicle operating expenses were major contributors to the higher 2026 business rate.
It’s important to note that a portion of the business mileage rate is treated as depreciation for tax purposes.
According to Notice 2026-10, the depreciation component for 2026 increased compared to prior years — which can affect gain or loss calculations when the vehicle is eventually sold.
3️⃣ What to Document for Mileage Deductions
The IRS requires detailed records to support mileage deductions.
Simply estimating miles at year-end is not sufficient. Proper documentation should include:
- Date of each trip
- Business purpose of the trip
- Starting point and destination
- Beginning and ending odometer readings
- Notes or receipts supporting the business activity
During an audit, one of the first items the IRS requests is a complete mileage log.
Apps such as MileIQ can help automate tracking, but entries should still be reviewed regularly to confirm accuracy and purpose.
4️⃣ Real-World Deduction Example
- 2025 rate: 15,000 × $0.70 = $10,500
- 2026 rate: 15,000 × $0.725 = $10,875
👉 Same mileage, but $375 more in deductions under the 2026 rate.
5️⃣ EA Takeaway
The 2026 IRS standard mileage rate reflects rising vehicle ownership and operating costs, resulting in a modest but meaningful increase for business use.
The rate applies equally to gas vehicles, hybrids, and EVs.
As always, accurate mileage tracking and consistent documentation are what turn the rate into real tax savings.
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1️⃣ Is commuting mileage deductible?
No. Travel between home and a regular work location is considered commuting and is generally nondeductible.
Client visits, temporary job sites, and other business-related travel may qualify when properly documented. -
2️⃣ Why does depreciation within the mileage rate matter?
Because the depreciation portion reduces your vehicle’s tax basis, it can affect gain or depreciation recapture when the vehicle is sold. -
3️⃣ Does the same rate apply to EVs and hybrids?
Yes. The standard mileage rate does not vary by vehicle type, though actual expenses may differ. -
4️⃣ Can I switch between standard mileage and actual expenses?
Your initial choice matters. Starting with standard mileage generally preserves future flexibility; starting with actual expenses can limit later changes. -
5️⃣ Can I deduct mileage for multiple vehicles?
Yes, but mileage logs must be maintained separately for each vehicle. -
6️⃣ Are mileage-tracking apps acceptable to the IRS?
Yes, as long as required details are recorded and reviewed for accuracy.
This article is based on current IRS guidance and educational materials.
Tax outcomes vary by individual circumstances.
Consult a qualified tax professional for advice specific to your situation.