The Internal Revenue Service’s annual inflation adjustments are among the changes we’ll encounter in 2026. And today, the agency finally announced next year’s standard optional mileage rate amounts you can use next year to claim various deductible vehicular trips.
The details are in IRS Notice 2026-10, but here’s the upshot.
The standard optional mileage rate you can use in 2026 to claim eligible business road travel will go to 72.5 cents per mile. That’s a 2½-cent increase over the 2025 mileage rate.
However, two other on-the-road tax travel rates for 2026 — for medical purposes and relocation of active-duty members of the Armed Forces (and now, thanks to the One Big Beautiful Bill Act, certain members of the intelligence community) — are less. They drop to 20.5 cents per mile, a half cent less from 2025’s rates.
Then there’s the standard optional mileage for travel in service of charitable organizations. It’s still 14 cents per mile. Inflation doesn’t affect this rate, since it’s set by law.
The table below shows the new 2026 optional standard mileage rates, calculated on a cents-per-mile basis. You’ll also see the 2025 rates, since you’ll use them on the tax return you file next year.
| Tax Year | Business | Medical | Moving | Charity |
| 2025 | 70 | 21 | 21 | 14 |
| 2026 | 72.5 | 20.5 | 20.5 | 14 |
The rates for both tax years apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.
Why the mileage rates differ: As noted, the mileage rate for travel to help out your favorite IRS-approved charity is set by statute, meaning that the 14-cents-per-mile calculation can only be changed by Congress. It’s been at that level since it was set as part of the Taxpayer Relief Act of 1997 (Public Law 105-34) that took effect in 1998.
However, the rates for the other potentially deductible drives generally reflect the way the economy and inflation are going, but not necessarily in straightforward ways. They are based on two different data sets, the fixed and the variable costs of operating a vehicle, which can be confusing and, for many drivers who depend on them, infuriating.
The mileage rate for business use is based on a yearly look at the fixed and variable costs. The rate for medical and moving purposes, meanwhile, is based on only the variable costs from that annual study.
As explained in the aforementioned Notice 2026-10 (yes, the IRS is getting a jump on the New Year in its notice numbering), the IRS hires an independent contractor to calculate the mileage rates, aside from the charitable one that’s set by law, and to evaluate the fixed and variable costs of operating a vehicle.
The biggest fixed automotive cost is the vehicle price. The biggest variable cost is gasoline. It’s those different vehicular cost categories that account for the differences in the rates.
The business rate is determined using both the fixed and variable costs’ studies. The rate for medical and moving purposes is based only on the car’s variable costs.
Since the business driving rate is based on both sets of vehicle costs, when it goes up, the amount tends to be more than the medical or moving categories. When the variable costs go down, such as when fuel prices drop, the medical and moving rates are reduced, too.
Moving expenses also limited by tax reform: Before changes made by the Tax Cuts and Jobs Act (TCJA) of 2017 and, for the most part continued permanently by July 4thh-enacted One Big Beautiful Bill Act (OBBBA) of 2025, any taxpayer who made a work-related move could deduct their travel expenses.
But the major Republican tax reform measures now limit this tax break to the required relocation of some military and intelligence community personnel. These individuals are the only one who get to claim the 20.5 cents per mile in 2026 or 21 cents this year.
A medical mileage tax Rx: Medical mileage, however, is still available to all qualifying filers. But they must include the mileage write-off as part of the itemized expenses they claim on Form 1040 Schedule A.
If you find that itemizing will gives you a larger deduction, definitely file that way. And be sure to count all your deductible medical expenses, including medical-related travel.
The 20.5 cents per mile rate for 2026 (21 cents for 2025 returns) covers road trips to medical treatments (and, in some instances, medical conferences), as well as when you drive to the pharmacy to pick up your prescriptions. The IRS has a full (and ever changing/expanding) list of deductible medical expenses.
Charitable driving cheated: Some who choose to itemize also count on deductible charitable donations to increase their itemized tally. Those gifts to nonprofits can include miles driven in connection with services for and by an IRS-authorized charity.
Common charitable mileage claims include volunteer delivery of meals to the home-bound or providing transportation to individuals who are getting help from a qualified charity.
But, as noted earlier, this 14-cents-per-mile rate cannot be changed by the IRS in its annual mileage adjustments. If you agree with me that it should be inflation adjusted, too, let your U.S. Representative and Senators know.
Other business mileage tax considerations: I know this seems like a long trip, but before wrapping up this mileage-related tax deduction post, let me take a related business travel detour.
Many business taxpayers use the optional standard rate when figuring how much in mileage costs they can claim. It’s easy and just requires you to keep track of your work-related miles. But note the description of the rates as optional. You can choose to calculate the actual cost of using your vehicle rather than using the standard mileage rates.
The mileage deduction choice, like every other tax decision, depends on your personal situation.
It’s generally a no-brainer to use the one that will give you more tax savings. Some filers, however, find convenience is more valuable, especially if the tax-saving difference is, from their perspective, negligible.
Make your choice wisely, especially if you’re claiming the business mileage rates for the first time. The IRS points out that you can’t use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. Yeah, that’s a lot of IRS tax-speak for additional calculations you’ll have to make here.
The bottom line is that if you initially opt for the actual-expenses method the first time you ever make a business mileage tax claim, you’re stuck using that method for as long as you use that vehicle.
If, however, you choose the optional standard mileage rate when you first put a vehicle into business use, in later years you can choose to keep using the fixed-mile rate or switch to totaling your auto’s actual expenses.
Note, too, that if you lease your business use vehicle, you must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.
Side hustles and employee business miles: What if your business is a gig job to supplement other full-time salaried income? Those miles also can help you reduce what you owe Uncle Sam on this taxable self-employment side hustle.
Regardless of whether the miles are for your own business’ travel or a side gig, be sure to keep complete and contemporaneous records of every allowable trip. If the IRS questions your claim, the thorough records will support your tax deduction’s legitimacy.
Then there are those employees who drive their cars for work. Do they get any tax deduction for those miles?
Sorry, but those work-related miles as a wage-earning staffer aren’t of any tax use. The Republicans’ two major tax reform laws eliminated the miscellaneous itemized deduction on Schedule A where employees could claim unreimbursed business expenses, including the costs of operating an automobile in connection with their jobs.
Again, this affects only salaried workers who drive in connection with their jobs. In these cases, you need to talk with your employer about an adjusted compensation or reimbursement method.
Exiting the tax inflation highway: Finally, and I mean that literally in connection with this post, this is the last of the ol’ blog’s 10-part tax inflation series.
Technically, today’s IRS notice on 2026 tax year standard optional mileage rates isn’t part of the agency’s overall annual inflation adjustments to a variety of tax provisions. But the mileage rate adjustments merge nicely into that changing tax amounts roadway.
So, each year it is the final part of my annual look at how inflation affects myriad parts of our taxes.
I know many of you are like the hubby, focused on getting to your destination as quickly as possible. I, on the other hand, enjoy the travel there. Whichever kind of traveler, tax or real life, you are, thanks for reading this final inflation series post and the other nine, which are listed below.
- 2026 tax rates and income brackets
- Standard deduction amounts and itemized deduction considerations
- Credits and deductions, including adoption costs and assistance, Lifetime Learning Credit, Earned Income Tax Credit, educators’ expenses, interest on education loans and transportation fringe benefits
- Medical-related tax provisions, including contributions to a flexible spending account (FSA), health savings account (HSA), medical savings account (MSA), and eligible and eligible long-term care premiums
- Capital gains tax income brackets, estate and gift tax limits, kiddie tax, kiddie tax, and nanny tax
- Alternative Minimum Tax exemption amounts and One Big Beautiful Bill Act changes for 2026, along with the Social Security wage base increase amount and other pay-related taxes
- International worker tax issues, including foreign income and housing exclusions
- Retirement (e.g., IRA etc.) and pension plan contribution limits
- Penalties, for both individuals and tax pros, for things such as failure to file a timely 1040 or certain information returns
- Standard mileage deduction rates (This is the final component, since the IRS issues these adjustments and later in the year.)
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