Mini coupe vehicle traveling on road
The last time the IRS increased the standard mileage rate in the middle of the year was in 2022. Now, the IRS has announced another rare mid-year adjustment for 2026, citing the sharp rise in gasoline prices.
Effective July 1, 2026, taxpayers can claim a higher standard mileage rate for qualifying travel.
New IRS Standard Mileage Rates for the Second Half of 2026
- Business: 76 cents per mile (up from 72.5 cents)
- Medical: 23.5 cents per mile (up from 20.5 cents)
- Moving (qualified active-duty military): 23.5 cents per mile
- Charitable organizations: 14 cents per mile (unchanged)
Why the IRS Increased the Mileage Rate
This rare mid-year adjustment reflects just how much transportation costs have increased. According to the American Automobile Association (AAA), the average price of gasoline rose from $2.81 per gallon on January 1 to $3.89 per gallon by mid-year—a 38% increase.
Who Benefits From the Higher Mileage Rate?
The increase could benefit millions of taxpayers, particularly:
- Independent contractors
- Self-employed workers
- Gig economy workers
- Rideshare and delivery drivers
- Real estate agents
- Sales professionals
- Taxpayers claiming deductible medical expenses
How Much Could You Save?
The higher mileage rate can translate into a meaningful tax deduction.
For example, someone who drives 10,000 business miles during the second half of 2026 can deduct $7,600 using the new rate. That’s $350 more than they would have been able to deduct using the previous 72.5-cent rate.
Don’t Overlook the Medical Mileage Deduction
Many taxpayers don’t realize they may be able to deduct miles driven for qualifying medical purposes.
Eligible travel may include:
- Doctor appointments
- Hospital visits
- Prescription pickups
- Other qualifying healthcare-related travel
Keep in mind that medical expenses are deductible only to the extent they exceed 7.5% of your adjusted gross income (AGI). Tracking medical mileage can help increase your total deductible medical expenses and make it easier to reach that threshold.
The Easiest Way to Track Mileage
Keeping accurate mileage records doesn’t have to be difficult.
Several smartphone apps automatically track your trips in the background. For example, QuickBooks Mileage Tracker records your travel and allows you to categorize each trip as business or personal. At tax time, the app generates reports that can make preparing your tax return much easier.
What If You Didn’t Track Your Mileage?
While it’s always best to keep a mileage log throughout the year, all hope is not lost if you forgot.
In some cases, you may be able to reconstruct your mileage using third-party records.
For example, I once represented a state teacher who worked as an independent contractor. She was audited by the IRS but had not maintained a mileage log. Fortunately, the state had records documenting every location where she worked. We used those records to recreate her mileage log, and she was able to substantiate her deduction during the audit.
Although reconstructing mileage is possible in certain situations, maintaining contemporaneous records is always the strongest approach and can lead to significant tax savings.
Important Reminder: You’ll Need Two Different Mileage Rates
Because this is a mid-year rate change, taxpayers cannot simply multiply their total annual business miles by the new rate.
Instead, you’ll need to separate your mileage into two periods:
- January 1 through June 30, 2026: Use the old mileage rate.
- July 1 through December 31, 2026: Use the new mileage rate.
Keeping accurate records for both periods will ensure you claim the correct deduction and maximize your tax savings.
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