The IRS has announced an increase to the standard business mileage rate for the second half of 2026. Beginning July 1, 2026, the rate increases from 72.5 cents per mile to 76 cents per mile for business miles driven.

2026 Business Mileage Rates

January 1 – June 30, 2026: 72.5¢ per mile

July 1 – December 31, 2026: 76¢ per mile

*The applicable rate is based on when the business mileage was incurred, so miles driven before July 1, 2026 remain subject to the 72.5-cent rate even if reimbursed later.*

What This Means for You

If you are eligible to deduct business mileage or your employer reimburses business mileage under an accountable plan, you’ll need to apply the correct rate based on when the miles were driven. Because the rate changed mid-year, maintaining accurate mileage records is especially important for 2026.

For example, business miles driven in June must be calculated using the 72.5¢ rate, while miles driven in July and later should be calculated using the new 76¢ rate.

Keep Good Records

The IRS requires documentation to support business mileage deductions. Be sure to maintain a mileage log that includes:

• Date of travel
• Business purpose
• Starting and ending locations
• Total annual business miles driven

If you have questions about how this change impacts your business or would like assistance with mileage recordkeeping, please contact our office.

This mid-year rate increase may provide a larger deduction for business vehicle expenses during the second half of 2026, making accurate tracking more valuable than ever.

For example, a business owner who drives 10,000 business miles during the second half of 2026 could deduct up to $7,600 using the standard mileage method.

Polk & Associates

Large enough to serve a diverse clientele, yet small enough to maintain a hands-on approach, we are committed to maintaining the highest accounting and ethical standards with continuous education, extensive research resources, and excellent quality control.

Polk and Associates is a member of the Michigan Association of Certified Public Accountants, and the American Institute of Certified Public Accountants. The firm participates in the AICPA Peer Review Program, and has always received the highest level of award for its audit practice and quality control.