IRS Raises Mileage Rates for Business and Medical Travel Effective July 1, 2026

The IRS raised its standard mileage rates for business, medical, and moving expenses effective July 1, 2026, citing higher fuel costs tied to ongoing geopolitical tensions in the Middle East.

The updated rates apply to all eligible vehicle use for the second half of the 2026 tax year. Taxpayers who use their personal vehicles for business, medical travel, or qualifying moving expenses can use the new rates to calculate their deductions.

The IRS adjusts mileage rates periodically to reflect changes in the cost of operating a vehicle. The mid-year adjustment is less common than the annual January update but has occurred in previous years when fuel prices shifted significantly.

Inflation reached a three-year high in May 2026, with the consumer price index rising 4.2% over the prior 12 months. Energy costs were the primary driver of that increase.

A government watchdog also identified serious security gaps at the IRS during the same period, including 1,375 unauthorized entries into restricted areas and unpatched system vulnerabilities involving contractor access. The IRS said it is working to address the findings.

Taxpayers who use the standard mileage rate do not need to track actual vehicle expenses such as gas, insurance, and maintenance. They simply multiply the number of qualifying miles driven by the applicable rate. Those who prefer to deduct actual expenses can still do so, but must keep detailed records.

The updated rates are available on the IRS website at irs.gov. Taxpayers with questions about which rate applies to their situation should consult a tax professional.