The IRS mileage rate 2026 schedule changed mid-year. From July 1, business driving is 76 cents per mile, up from 72.5 cents in the first half. This guide is for business owners and employers who track vehicle miles. We will cover the new rates, the split-year mileage log, and what employers should update in payroll.
Mid-year rate changes are rare; the IRS usually sets one rate per year. The change comes from Announcement 2026-11, published in Internal Revenue Bulletin 2026-29. The agency cited recent fuel price increases, as reported by the Journal of Accountancy.
IRS mileage rate 2026: before and after July 1
| Purpose | Jan 1 – Jun 30, 2026 | Jul 1 – Dec 31, 2026 |
|---|---|---|
| Business | 72.5 cents/mile | 76 cents/mile |
| Medical / military moving | 20.5 cents/mile | 23.5 cents/mile |
| Charitable | 14 cents/mile | 14 cents/mile (fixed by law) |
So the business rate rises 3.5 cents, and medical and moving miles gain 3 cents. Meanwhile, the charitable rate stays put because Congress, not the IRS, sets it.
Why your 2026 mileage log now has two halves
Here is the bookkeeping consequence most people miss. Because the year now contains two rates, every 2026 mileage record must show when the miles happened, not just how many there were. Miles driven through June 30 use the old rates. Miles from July 1 forward use the new ones.
A compliant mileage log has always needed the date, the business purpose, the destination, and the miles for each trip. In a split-rate year, the date carries real money. A log that only says “14,000 miles in 2026” leaves your tax preparer guessing at the split. Also, guesses do not survive audits well.
If your log lives in an app, you are probably fine. QuickBooks Online’s mileage tracker, MileIQ, and Everlance all stamp every trip with a date automatically. If your log lives on a legal pad or in your head, this is the nudge to fix that. Reconstructing a year of driving in January is exactly the kind of cleanup work nobody enjoys paying for.
Employers: update your reimbursement rate now
Many businesses reimburse employees for business driving at the IRS standard rate under an accountable plan. Two practical points, both squarely in payroll territory:
- Update the rate in your systems. If your software reimburses at a stored per-mile figure, change it to 76 cents. It applies to miles driven on or after July 1. Reimbursements for June miles submitted late still use the old rate; the drive date controls, not the submission date.
- Reimbursing above the IRS rate has consequences. As a general rule, the excess over the standard rate becomes taxable wages that belong in payroll. Reimbursing at or below the rate, with proper records, keeps it clean.
What this means for your books
For our clients, this change is mostly a checklist item, because the groundwork already exists. Mileage apps capture dates, and reimbursements run through accountable plans at the standard rate. As a result, the year-end handoff to the CPA is a clean two-column summary. If your setup does not look like that, the second half of 2026 is a fine time to start; a half-year of clean records beats another full year of estimates.
Whether to use the standard rate or actual vehicle expenses on your return is an income tax decision. That one belongs to your CPA. Our job is making sure the records exist so the decision is based on real numbers. That is the same philosophy behind our guide on bookkeeping cleanups: reconstruct once, then never again.
How Books LA handles this
Books LA sets up mileage tracking that captures dates automatically. We keep reimbursements flowing through payroll correctly and deliver CPA-ready summaries at year end. Details on our services page.
Frequently asked questions
Do I really need to split my 2026 miles into two periods?
Yes. The old rates apply to miles driven through June 30 and the new rates from July 1 forward, per the IRS announcement. Any dated log or mileage app handles this automatically. An undated total does not, and someone will have to reconstruct the split later.
What if I have been reimbursing employees at 72.5 cents since July?
You can true it up. Calculate the difference for miles driven since July 1. Then pay the catch-up through your normal reimbursement process, with mileage records attached. Then update the stored rate so it stops recurring.
Does my commute count as business miles?
No. Driving between home and your regular workplace is commuting, and commuting is not deductible business travel under the general rules. Trips between job sites, to client meetings, or for supply runs generally do count. When a situation is unclear, ask your CPA before logging it.
Can I just deduct gas receipts instead?
Gas receipts belong to the actual-expense method, which is a different calculation from the standard mileage rate, with its own rules. Choosing between the two methods is a call for your CPA. Either way, the records must exist first, and that part is bookkeeping.
Which apps track mileage with dates automatically?
QuickBooks Online has a built-in mileage tracker in its mobile app, and dedicated tools like MileIQ and Everlance auto-detect drives. Anything that stamps each trip with a date, purpose, and distance satisfies the record-keeping need, including a disciplined spreadsheet.
Does the new rate change my January-June records?
No. Nothing about the first half of the year changes. The old rates still apply to all miles driven before July 1. So there is nothing to restate; simply apply the new rates going forward.
If your mileage records are more vibes than logs, book a short call with Books LA and we will set up tracking that runs itself.
This article is general information, not tax advice. Books LA provides bookkeeping services and does not provide income tax advice; we work with our clients’ CPAs on income tax matters. Confirm how the mileage rates apply to your situation with your CPA or the IRS announcement.
