IRS Optional Standard Mileage Rate for Business Use of Automobiles Increases in 2026
The Internal Revenue Service just announced that the optional standard mileage rate for automobiles driven for business will increase by 2.5 cents in 2026, however the mileage rates for vehicles used for medical purposes will decrease by .5 cents. These changes reflect updated cost data and annual inflation adjustments.
Optional standard milage rates are used to calculate the deductible costs of operating vehicles for business, charitable and medical purposes, for active-duty members of the Armed Forces who are moving, and most recently certain intelligence community members.
Starting January 1, 2026, the standard mileage rates for the use of a car, van, pickup or panel truck are as follows:
- 72.5 cents per mile driven for business use, up 2.5 cents from 2025.
- 20.5 cents per mile driven for medical purposes, down a half cent from 2025.
- 20.5 cents per mile driven for moving purposes for certain active-duty members of the Armed Forces (and now certain members of the intelligence community), reduced by a half cent from last year.
- 14 cents per mile driven in service of charitable organizations, equal to the rate in 2025.
The rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.
As always, use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle but we do not recommend this method. Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the first year the automobile is available for business use. Then, in later years, they can choose to use the standard mileage rate or actual expenses. For a leased vehicle, taxpayers using the standard mileage rate must employ that method for the entire lease period, including renewals.
Do you have any questions about 2026 labor and employment law changes? Rosasco Law Group can help make sure your workplace is up-to-date!
