IRS Mileage Rate 2026: What 72.5 Cents Per Mile Means for Your Deductions

The IRS announced the 2026 standard mileage rate in January: 72.5 cents per mile for business use of a personal vehicle. That is a 2.5-cent increase from the 2025 rate of 70 cents, and it directly affects every self-employed worker, gig driver, and small business owner who drives for work.

This guide breaks down what the new rate means, when it beats the actual expense method, and how to make sure you are maximizing your deduction.

2026 IRS Mileage Rates at a Glance

Purpose	2026 Rate	2025 Rate	Change
Business	72.5¢/mile	70¢/mile	+2.5¢
Medical / Moving (active military)	20.5¢/mile	21¢/mile	-0.5¢
Charitable	14¢/mile	14¢/mile	No change

The business rate increase reflects rising fuel prices, vehicle maintenance costs, and depreciation. Gas prices averaged $3.70/gallon nationally in early 2026 and have climbed past $4.00 as of April — the highest in over a year.

What the Rate Covers

The standard mileage rate is an all-in-one number. It accounts for:

• Gas and oil
• Depreciation (35 cents of the 72.5-cent rate is allocated to depreciation)
• Insurance
• Repairs and maintenance
• Tires
• Registration fees

If you use the mileage rate, you cannot deduct any of these items separately. However, you can still deduct:

• Parking fees for business purposes
• Tolls for business trips
• Interest on a car loan (business percentage)
• Personal property tax on the vehicle

How Much Is the Deduction Worth?

The value of the mileage deduction depends on how many business miles you drive. Here is what the 72.5-cent rate produces at different mileage levels:

Annual Business Miles	Mileage Deduction	Tax Savings (25% rate)
5,000	$3,625	$906
10,000	$7,250	$1,813
15,000	$10,875	$2,719
20,000	$14,500	$3,625
30,000	$21,750	$5,438

A full-time DoorDash or Uber driver logging 25,000 business miles per year gets an $18,125 deduction — producing roughly $4,500 in actual tax savings at a 25% effective rate. The 2.5-cent increase alone adds $625 compared to 2025.

Mileage Rate vs Actual Expenses: When Each Wins

You must choose one method per vehicle per year. Here is when each approach works best:

Use the Standard Mileage Rate When:

• You drive a fuel-efficient or low-cost vehicle
• Your car is paid off (no loan or lease payments)
• You want simplicity — no need to save every receipt
• Your annual vehicle operating costs are below roughly $0.725 per mile driven

Use the Actual Expense Method When:

• You have high car payments (loan or lease) on a newer vehicle
• Your insurance premiums are high
• You had expensive repairs during the year
• Your vehicle qualifies for 100% bonus depreciation (restored under the One Big Beautiful Bill Act)

For a full comparison with worked examples, see our guide on standard mileage rate vs actual expenses.

Who Qualifies to Use the Mileage Rate

You can use the standard mileage rate if you:

• Are self-employed, an independent contractor, or a gig worker
• Own (not lease through a fleet arrangement) the vehicle
• Use no more than five vehicles simultaneously for business
• Did not use MACRS depreciation on the vehicle in a prior year
• Did not claim a Section 179 deduction on the vehicle

Important first-year rule: If you want to use the mileage rate, you must elect it in the first year the vehicle is placed in service for business. If you start with actual expenses and claim depreciation, you are locked into actual expenses for the life of that vehicle.

What Records Does the IRS Require?

The IRS requires a contemporaneous mileage log — meaning you record trips close to when they happen, not from memory months later. Your log must include:

• Date of each business trip
• Destination (or route description)
• Business purpose (delivery, client meeting, supply run, etc.)
• Miles driven for each trip
• Total miles for the year (business + personal)

You do not need gas receipts if you use the mileage rate, but keeping them alongside your mileage log strengthens your audit defense. Gas receipts verify that you were actually driving on the dates claimed. For best practices on documentation, see our guide on IRS-compliant mileage logs.

The 2026 Increase and Rising Gas Prices

The 2.5-cent rate bump did not happen in a vacuum. Gas prices have surged in 2026 — national averages crossed $4.00/gallon in March and hit $4.09 by mid-April. In California, drivers are paying close to $6.00/gallon.

For gig drivers spending $200-400+ per month on gas, the actual expense method may now produce a larger deduction than the mileage rate — especially if you track every fill-up. The breakeven point shifts as gas prices rise.

If you use the actual expense method, you need to track every gas receipt. FuelSnap makes this automatic — scan your receipt or pump display in five seconds, and it extracts the date, station, volume, and total cost. At tax time, export a PDF or CSV report ready for Schedule C.

How the Mileage Rate Has Changed Over Time

Year	Business Rate
2026	72.5¢
2025	70¢
2024	67¢
2023	65.5¢
2022 (Jul-Dec)	62.5¢
2022 (Jan-Jun)	58.5¢

The rate has climbed steadily, reflecting the rising cost of vehicle ownership. The 2022 mid-year adjustment was unusual — the IRS raised it partway through the year in response to a gas price spike. A similar mid-year adjustment in 2026 is possible if gas prices continue climbing.

Key Takeaways

• The 2026 IRS standard mileage rate is 72.5 cents per mile for business use
• It covers gas, depreciation, insurance, maintenance, and repairs in one rate
• The mileage deduction is worth $7,250-21,750 for most gig drivers (10,000-30,000 miles)
• With gas prices above $4/gallon, run the numbers on both methods — the actual expense method may save you more
• Keep a contemporaneous mileage log regardless of which method you choose
• If you use the actual expense method, scan every gas receipt with FuelSnap so nothing slips through the cracks