Business Mileage Rate 2026: IRS Standard Rate Guide

The IRS standard business mileage rate for 2026 is 72.5 cents per mile, up 2.5 cents from 2025. This rate applies to mileage driven for business purposes in vehicles used for trade or business (IRC §162(a)). The standard mileage rate allows you to multiply business miles by 72.5 cents and claim that amount as a deduction. No receipts for fuel, repairs, or maintenance are required—only documentation of mileage driven and business purpose (IRC §274(d)). This method is available for self-employed individuals, small business owners, and employees who travel for work. For example, a consultant who drives 20,000 business miles annually can deduct $14,500 (20,000 × $0.725) without tracking actual fuel, maintenance, or insurance costs. The IRS sets standard mileage rates annually based on the average cost of operating a vehicle, including fuel, maintenance, and depreciation. Special rates apply for medical/moving purposes (20.5 cents per mile in 2026) and charitable purposes (14 cents per mile in 2026) under IRC §213 and §170 respectively.

The alternative to the standard mileage method is the 'actual expense' method, where you track all vehicle costs—fuel, maintenance, insurance, depreciation, registration fees, and repairs—and deduct the percentage that applies to business use. This method is more complex but may yield a larger deduction if your vehicle is expensive or has high operating costs. You must calculate your business-use percentage (business miles divided by total miles), then multiply each expense category by that percentage. For example, if your vehicle costs $2,000 annually in fuel, $800 in insurance, $500 in repairs, and you drive 50% business and 50% personal, you can deduct $1,650 in vehicle expenses. Election rule (Rev. Proc. 2019-46): To use the standard mileage rate, the taxpayer must elect it in the first year the vehicle is available for business use. If you use the actual expense method in year one, you cannot switch to standard mileage in future years for that vehicle. Conversely, if you elect standard mileage in year one, you can switch to actual expenses in later years (though depreciation must then use straight-line method). The actual expense method is required for fleet operations with five or more vehicles (IRS Pub. 463) and if you've already claimed depreciation or Section 179 expensing on the vehicle. The standard mileage method requires less recordkeeping than the actual expense method and is available to most taxpayers whose vehicle costs are moderate. Note: the standard mileage rate does not include parking fees, tolls, or tickets, which are separately deductible alongside the mileage deduction.

IRS regulations require contemporaneous documentation to substantiate mileage deductions (Treas. Reg. §1.274-4(c)). The IRS requires contemporaneous documentation of business mileage: maintain a log or diary recording the date, starting and ending odometer readings (or distance), destination, and business purpose of each trip (Treas. Reg. §1.274-4(c)). A logbook in your vehicle or a mileage tracking app (Everlance, MileIQ, TripLog) satisfies this requirement. The vehicle must be used 'regularly and exclusively' for business during the period you claim the deduction (IRC §162(a)). Vehicles used for personal commuting and weekend trips cannot be categorized as business vehicles. For the standard mileage deduction, the IRS expects: (1) contemporaneous mileage documentation, (2) proof the vehicle is used for business, and (3) written evidence of the business purpose (emails, contracts, calendars). The IRS has identified overstated mileage claims as an audit focus area (IRS Audit Techniques Guide), from individuals claiming 95%+ business use in vehicles also used for commuting and personal activities. Year-end review can compare the standard mileage deduction against actual vehicle expenses to determine which method yields greater deductions. Important: if you have multiple vehicles, you can only claim mileage for the vehicle(s) actually used for business, not for every vehicle in your household.