Why 2026 needs two rates
The IRS usually sets one standard mileage rate a year. For 2026 it set 72.5¢ in January and then raised it to 76¢ for driving from July 1, so every 2026 deduction is miles before July times one rate plus miles after times the other. A single rate applied to the whole year is wrong either way.
On the example, 4,000 miles in each half: $2,900.00 plus $3,040.00, a $5,940.00 deduction. For comparison, 2025’s rate was 70¢ for the whole year.
What the deduction is actually worth
A deduction lowers your profit, not your tax bill dollar for dollar. For a self-employed person each dollar of it saves self-employment tax (about 14.1¢) as well as income tax at your top rate, which is why the savings figure above runs both through the same 2026 model the quarterly calculator uses. For most people it comes to between a fifth and a third of the deduction.
The log is the deduction
Without a record made at the time, the deduction is hard to defend. For each trip: the date, where you went, why, and the miles. Odometer readings at the start and end of the year help. An app that records the trip as it happens beats a spreadsheet filled in at year end, which is exactly what an auditor is trained to spot.
Deduction or reimbursement?
This works out a deduction, for people who drive for their own business. If you’re an employee and your employer reimburses mileage at the IRS rate, the math is the same split: 72.5¢ a mile before July 1 and 76¢ after, so the deduction figure above is also the 2026 reimbursement at the full rate. Reimbursement up to that rate isn’t taxable income. Employees generally can’t deduct unreimbursed work miles on their federal return.
Questions, answered
What is the IRS mileage rate for 2026?
The IRS changed it mid-year: 72.5 cents a mile for business driving from January 1 to June 30, 2026, and 76 cents a mile from July 1 to December 31, 2026. Miles have to be counted separately for the two halves.
How do I calculate my mileage deduction?
Multiply the business miles you drove from January to June by $0.725, the miles from July to December by $0.76, and add the two. On 4,000 miles in each half, that is $2,900 plus $3,040: a $5,940 deduction.
What counts as business miles?
Driving from one work location to another, to clients, to job sites, to pick up supplies, or to the bank for the business. Your regular commute from home to a regular place of work does not count, even if you work for yourself, unless your home is your principal place of business.
What records do I need for the mileage deduction?
A log kept at or near the time: the date, where you went, the business purpose and the miles for each trip, plus your total miles for the year. Reconstructing a log months later is the usual reason a mileage deduction fails in an audit.
Standard mileage rate or actual expenses?
The standard rate covers gas, repairs, insurance and depreciation in one number and only needs a mileage log. Actual expenses can come out higher for an expensive vehicle driven mostly for work, but need every receipt. If you want the standard rate for a car you own, you have to use it in the first year the car is used for business.
Sources
- Standard mileage rates — IRS. The 2026 rates, 72.5 cents January to June and 76 cents from July 1.
- Publication 463, Travel, Gift, and Car Expenses — IRS. What counts as business driving, the records required, and standard rate vs actual expenses.
- Self-employment tax — IRS. Why a deduction also lowers self-employment tax.
