IRS Raises Business Mileage Rate to 70 Cents Per Mile Starting July 1, 2026
The IRS increased its standard mileage rates effective July 1, 2026, in response to higher fuel prices. The business mileage rate rose to 70 cents per mile, up from 67 cents. Medical and qualified moving mileage rates also increased. The changes affect millions of workers who use personal vehicles for business purposes and claim mileage deductions.
The IRS raised its standard mileage rates effective July 1, 2026, citing higher fuel prices driven by geopolitical tensions and inflation.
The business mileage rate increased to 70 cents per mile, up from 67 cents per mile in the first half of 2026. The medical and qualified moving mileage rate also rose. The IRS adjusts these rates periodically to reflect changes in the cost of operating a vehicle.
The increase affects millions of workers who use personal vehicles for business purposes and claim mileage deductions on their taxes, as well as employers who reimburse employees for business travel.
For self-employed workers and small business owners, the higher rate means a larger deduction per mile driven for business. A worker who drives 15,000 business miles in the second half of 2026 would be able to deduct $10,500 at the new rate, compared to $10,050 at the previous rate.
The adjustment comes as inflation reached a three-year high of 4.2% for the 12 months ending in May 2026, with energy costs accounting for more than 60% of the monthly gains. Gasoline prices have risen sharply due to tensions in the Middle East affecting global oil supply.
Tax professionals advise workers to keep detailed mileage logs to support their deductions, particularly given the mid-year rate change, which requires tracking miles driven before and after July 1 separately.
The IRS last raised the business mileage rate in January 2024. The July 2026 increase is the first mid-year adjustment since 2022, when the agency also raised rates in response to a spike in fuel costs.
