In an unusual mid-year action, the Internal Revenue Service has announced an increase in the optional standard mileage rates for computing the deductible costs of operating an automobile for business, medical, and moving expense purposes for the second half of 2026. This change was announced in Internal Revenue Bulletin 2026-29. The mid-year change was attributed to recent increases in fuel prices. The standard mileage rate for computing the deductible costs of operating an automobile for charitable purposes is set by statute and remains unchanged.
What are the new rates?
For July 1, 2026, to December 31, 2026, the standard mileage rates are as follows:
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- Business use of auto: 76 cents per mile (up from 72.5 cents for January 1, 2026, to June 30, 2026), may be deducted if an auto is used for business purposes. If you are an employee, your employer may reimburse you for your business travel expenses using the standard mileage rate. However, if you are an employee and your employer does not reimburse you for your business travel expenses, you are generally not able to deduct your unreimbursed travel expenses.
- Medical use of auto: 23.5 cents per mile (up from 20.5 cents for January 1, 2026, to June 30, 2026), may be deducted if an auto is used to obtain medical care (or for other deductible medical reasons) if you itemize deductions on your federal income tax return. You can deduct only the part of your medical and dental expenses that exceeds 7.5% of the amount of your adjusted gross income.
- Moving expense: 23.5 cents per mile (up from 20.5 cents for January 1, 2026, to June 30, 2026), may be deducted if an auto is used by a member of the Armed Forces on active duty to move, pursuant to a military order, to a permanent change of station (unless such expenses are reimbursed). An employee or new appointee of the intelligence community may also deduct moving-related costs if the move relates to a change in assignment requiring relocation. The moving-expense deduction is not currently available to other taxpayers.
- Charitable use of auto: 14 cents per mile (the same as for January 1, 2026, to June 30, 2026), may be deducted if an auto is used to provide services to a charitable organization if you itemize deductions on your income tax return. Your charitable deduction may be limited to certain percentages of your adjusted gross income, depending on the type of charity, and subject to a 0.5% floor.
How rare is a mid-year adjustment?
Typically, the IRS issues new optional standard mileage rates during the last few months of the year, with the new rates effective January 1 of the following year. Occasionally, however, the IRS announces mid-year changes. This year’s increase will be the fifth mid-year increase in 20 years.
Prior years with mid-year adjustments include 2005, 2008, 2011, and 2022. As with this year’s increase, these prior mid-year standard mileage rate announcements were largely tied to fuel costs.
Sam H. Fawaz CFP®, CPA, PFS is the President of YDream Financial Services, Inc., a fee-only investment advisory and financial planning firm serving the entire United States. If you would like to review your current investment portfolio or discuss any other retirement, college, tax, or financial planning matters, please don’t hesitate to contact us or visit our website at http://www.ydfs.com. We are a fiduciary financial planning firm that always puts your interests first, with no products to sell. If you are not a client, an initial consultation is complimentary, and there is never any pressure or hidden sales pitch. We begin with a thorough assessment of your unique personal situation. There is no rush and no cookie-cutter approach. Each client’s financial plan and investment objectives are unique.
Source: Broadridge Advisor Solutions. © 2026 Broadridge Financial Services, Inc.
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