Mileage rates increase again in 2026. That’s welcome news for drivers who use their vehicles for work. The Internal Revenue Service has set the standard business mileage rate at 72.5 cents per mile for the year. This reflects an increase of 2.5 cents per mile from 2025.
The IRS reviews mileage rates annually. It looks at fuel prices, maintenance costs, insurance, and depreciation. When those costs rise, mileage rates often follow. The 2026 increase reflects the ongoing expense of owning and operating a vehicle for business purposes.
What the 2026 Mileage Rate Changes Look Like
The IRS adjusted several mileage categories for 2026:
- Business use: 72.5 cents per mile, up from 70 cents
- Medical travel: 20.5 cents per mile, a slight decrease
- Moving expenses: 20.5 cents per mile for eligible taxpayers
- Charitable mileage: 14 cents per mile, unchanged
The business rate applies to most vehicles. This includes gas-powered, hybrid, and electric models. Taxpayers may still deduct actual vehicle expenses instead. However, once a method is chosen for a vehicle, switching later can be limited.
Why the Mileage Rates Increase Matters
A 2.5-cent increase may seem small. Over time, it adds up. Driving 10,000 business miles in 2026 equals $250 more in deductible or reimbursable expenses compared to last year.
This matters for self-employed professionals and independent contractors. Small business owners benefit as well. Employers who reimburse mileage should also take note. The updated rate affects payroll calculations and travel reimbursement policies.
As mileage rates increase, understanding the new numbers helps ensure accuracy. It also helps drivers capture the full value of business travel in 2026.
