More Money Per Mile: IRS Raises Mileage Reimbursement Rates
The IRS has announced an increase in the standard business mileage rate from 72.5 cents per mile to 76 cents per mile, effective July 1, 2026. Whether you’re a self-employed contractor, small business owner, or employee who is reimbursed for business travel, this change could reduce your out-of-pocket driving costs.
The higher rate reflects increased vehicle operating expenses, including fuel, maintenance, insurance, and depreciation.
The IRS mileage increase may seem small, but it adds up quickly.
Consider these examples:
- 5,000 business miles = $3,800 deduction
- 7,500 business miles = $5,700 deduction
- 10,000 business miles = $7,600 deduction
Compared with the previous rate, businesses and independent professionals could see hundreds of additional dollars in deductions or reimbursements over the second half of the year.
Using a mileage-tracking app or maintaining a detailed driving log helps ensure every deductible mile is captured. Consistent records make tax preparation easier and provide support if questions arise later.
Additionally, the IRS also increased the mileage rate for medical purposes – from 20.5 cents per mile up to 23.5 center per mile. The mileage rate for charitable purposes has been fixed at 14 cents per mile under Section 10(i) of the Internal Revenue Code.
