1.2 Standard Mileage Rates & Vehicle Rules
In December 2025, the IRS released Notice 2026-10, setting the optional standard mileage rates taxpayers may use to compute deductible automobile operating costs for business, medical, charitable, and eligible moving purposes during calendar year 2026. The business rate increased to 72.5 cents per mile; the medical and moving rate is 20.5 cents; and the charitable rate remains unchanged.
Background
Under IRC §162, taxpayers may deduct ordinary and necessary business expenses, including the cost of operating a vehicle used in a trade or business. IRC §170(i) permits a deduction for unreimbursed automobile use in service of a qualifying charitable organization. IRC §213 permits a deduction for transportation costs primarily for and essential to medical care.
Rather than tracking actual operating costs, taxpayers may elect to use an optional standard mileage rate announced annually by the IRS. The charitable rate is statutory and remains fixed at 14¢ per mile unless Congress changes it.
The 2026 Rates at a Glance
| Use of Vehicle | 2026 Rate | 2025 Rate | Change |
|---|---|---|---|
| Business (IRC §162) | 72.5¢ / mile | 70.0¢ / mile | +2.5¢ |
| Medical (IRC §213) | 20.5¢ / mile | 21.0¢ / mile | −0.5¢ |
| Moving eligible Armed Forces and intelligence community members | 20.5¢ / mile | 21.0¢ / mile | −0.5¢ |
| Charitable (IRC §170(i)) | 14.0¢ / mile | 14.0¢ / mile | no change |
Most taxpayers may not deduct moving expenses. However, qualified members of the Armed Forces and, under recent legislation, eligible members of the intelligence community may deduct qualified moving expenses and use the moving mileage rate when the move meets the applicable rules.
Business Rate — What Changed
The business rate rose 2.5 cents from 70.0¢ in 2025 to 72.5¢ per mile for 2026. Of that amount, 35¢ per mile is treated as depreciation. The FAVR plan ceiling for standard automobile cost is $61,700 for 2026.
Eligibility — Who May Use the Business Standard Mileage Rate
To use the business rate, a taxpayer must elect it in the first year the automobile is placed in service for business. After using standard mileage in year one, the taxpayer may switch to actual expenses in later years. If actual expenses, MACRS depreciation, or §179 expensing are used in year one, the taxpayer is generally locked into actual expenses for that vehicle.
The standard mileage rate is not available for fleet operators using five or more automobiles simultaneously, vehicles where §179 expensing was claimed, vehicles where depreciation other than straight-line was claimed, or vehicles where the rural mail carrier rate was previously claimed.
Worked Example 1 — Sole Proprietor Business Use
Shyla operates a freelance photography business and drives her 2023 SUV
14,200 business miles during TY2026. She also drove
6,800 personal miles, resulting in approximately
67.6% business use.
Using the standard mileage method: