IRS Increases Standard Mileage Rates for the Second Half of 2026: What Tax Professionals Need to Know

The IRS has announced a mid-year increase to the optional standard mileage rates for the remainder of 2026 in response to rising fuel costs. While annual mileage rate updates are common, mid-year adjustments are relatively rare, making this an important change for tax professionals and business owners alike.

The updated rates apply to qualifying miles driven on or after July 1, 2026.

What's Changing?

Beginning July 1, 2026, the IRS has increased the standard mileage rates to:

• 76 cents per mile for business use (up from 72.5 cents)

• 23.5 cents per mile for medical and qualified moving purposes (up from 20.5 cents)

• 14 cents per mile for charitable service (unchanged, as this rate is set by law)

  
  

These updated rates are intended to help offset the increased cost of operating a vehicle as fuel prices have risen throughout the year. The IRS last made a mid-year mileage adjustment in 2022 under similar circumstances.

Why This Matters for Your Clients

For self-employed individuals, independent contractors, and small business owners who regularly use their vehicles for business, this increase could result in larger deductions for qualifying travel during the second half of the year.

Some of the clients who may benefit include:

• Independent contractors

• Gig workers

• Real estate professionals

• Consultants

• Sales representatives

• Small business owners

• Sole proprietors

  
  

If your clients rely on their personal vehicles for business activities, now is a great time to remind them to maintain accurate mileage records.

Remember: 2026 Has Two Mileage Rates

Because the increase became effective July 1, tax professionals will need to account for two different mileage rates when preparing 2026 returns:

• January 1 – June 30, 2026: Business mileage is calculated at 72.5 cents per mile.

• July 1 – December 31, 2026: Business mileage is calculated at 76 cents per mile.

  
  

Keeping these periods separate will help ensure clients receive the correct deduction.

Encourage Clients to Track Their Mileage

Good documentation remains essential.

Encourage clients to keep detailed mileage logs throughout the year, including:

• Date of travel

• Starting and ending locations

• Business purpose of the trip

• Number of miles driven

  
  

Mileage tracking apps or digital logs can make recordkeeping much easier and help substantiate deductions if questions ever arise.

Final Thoughts

Although the increase may seem small on a per-mile basis, it can make a meaningful difference for clients who drive extensively for business. By understanding the updated rates and reminding clients to maintain accurate mileage records, you'll help ensure they receive every deduction they're entitled to.

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Disclaimer: This article is for informational and educational purposes only and does not constitute legal tax advice. Advanced Tax Solutions is not liable or responsible for any damages resulting from or related to your use of this information. It is your responsibility to refer to official IRS documentation for information regarding any tax laws or tax information shown here.