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

The IRS standard mileage rate for 2026 is 72.5 cents per mile for business use of a personal vehicle (IRS Notice 2026-10). The medical/moving rate is 20.5 cents per mile, and the charitable rate is 14 cents per mile. This rate took effect January 1, 2026.

The 2026 business rate is a 2.5-cent increase from the 2025 rate of 70 cents per mile, and it directly affects every self-employed worker, gig driver, and small business owner who drives for work. At 72.5 cents per mile, a driver logging 20,000 business miles gets a $14,500 deduction.

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.

IRS Mileage Rate History (2020-2026)

Year	Business Rate	Medical/Moving Rate	Charitable Rate
2026	72.5¢	20.5¢	14¢
2025	70¢	21¢	14¢
2024	67¢	21¢	14¢
2023	65.5¢	22¢	14¢
2022 (Jul-Dec)	62.5¢	22¢	14¢
2022 (Jan-Jun)	58.5¢	18¢	14¢
2021	56¢	16¢	14¢
2020	57.5¢	17¢	14¢

The business rate has increased 28% since 2020 (from 57.5¢ to 72.5¢), reflecting the rising cost of fuel, vehicle maintenance, and insurance. 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 past $4.50/gallon nationally.

How to Calculate Your Mileage Deduction: Step-by-Step

Here is a worked example for a gig driver filing their 2026 taxes:

1. Determine total business miles: Review your mileage log. You drove 18,500 total business miles in 2026.
2. Multiply by the IRS rate: 18,500 × $0.725 = $13,412.50
3. Add parking and tolls: You paid $340 in tolls and $120 in parking during business trips. Total: $460.
4. Total vehicle deduction: $13,412.50 + $460 = $13,872.50
5. Report on Schedule C: Enter mileage deduction in Part IV. Add parking/tolls in Part II, Line 9.

Tax savings: At a 22% federal bracket + 15.3% SE tax, a $13,872 deduction saves approximately $5,174 in total taxes. This is money that stays in your pocket — but only if you kept a mileage log throughout the year.

State Mileage Reimbursement Rates

The IRS standard mileage rate is a federal rate used for tax deductions. When it comes to employer mileage reimbursement, there is no separate state rate in most states — employers typically use the IRS rate of 72.5 cents per mile as the standard.

California Mileage Reimbursement

California Labor Code Section 2802 requires employers to reimburse employees for all necessary business expenses, including mileage. California does not publish its own per-mile rate — most California employers use the IRS rate of 72.5 cents per mile as a "reasonable" reimbursement. If you are a gig driver (independent contractor), you claim the IRS rate as a tax deduction on Schedule C rather than receiving employer reimbursement.

Other States

Most states do not mandate a specific mileage reimbursement rate. The IRS rate is the nationwide standard used by employers in all 50 states. If your employer reimburses at a lower rate, the difference is not deductible for W-2 employees (the unreimbursed employee expense deduction was eliminated in 2017). Self-employed individuals always deduct at the full IRS rate.

2026 Tax Changes That Affect Mileage Deductions

The One Big Beautiful Bill Act introduced several changes that interact with the mileage deduction:

• $25,000 tips deduction — Stacks on top of your mileage deduction. Claim both for maximum savings.
• QBI deduction permanent at 23% — Applied to net Schedule C profit after mileage deduction.
• 100% bonus depreciation restored — Makes the actual expense method more attractive for new vehicle purchases.
• 1099-K threshold at $20,000 — Fewer surprise tax forms, but you still owe tax on all income.

For gig drivers, the optimal strategy is to claim the mileage deduction (or actual expenses), then layer the tips deduction and QBI deduction on top. See our quarterly estimated tax guide for how these deductions reduce your quarterly payments.

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)
• California and all other states use the IRS rate as the standard for mileage reimbursement
• 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
• Stack mileage with the new tips deduction and QBI deduction for maximum savings
• If you use the actual expense method, scan every gas receipt with FuelSnap so nothing slips through the cracks