For 2026, multiply each business mile by the rate for the date you drove it: 72.5 cents for miles from January 1 to June 30, 76 cents for miles from July 1 to December 31. Add the two amounts, then add business parking and tolls. That’s your deduction under the standard mileage method. The other option is actual car expenses, where you deduct the business share of what the car cost you. Rates per the IRS mileage rate table. To run your own numbers, use the mileage deduction calculator.
Example (hypothetical): 9,000 business miles before July 1 and 3,000 after is 9,000 × $0.725 + 3,000 × $0.76 = $6,525 + $2,280 = $8,805, plus parking and tolls. The IRS raised the rate mid-year because of higher fuel prices, according to Announcement 2026-11. Using 72.5 cents for the whole year would understate your deduction for second-half miles.
The 2026 standard mileage rates
| Business miles driven | Rate | IRS source |
|---|---|---|
| January 1 – June 30, 2026 | 72.5¢ per mile | Notice 2026-10 (IR-2025-128) |
| July 1 – December 31, 2026 | 76¢ per mile | Announcement 2026-11 (July 13, 2026, IRB 2026-29) |
| All of 2025 (for your 2025 return) | 70¢ per mile | IRS mileage rate table |
The IRS wording is that the new rate applies to business transportation expenses “paid or incurred on or after July 1, 2026”, and the original rate continues for expenses before that date. For miles, that means the date you drove them. The IRS made mid-year changes before, in 2022 and 2011. The medical and moving rates are separate and also changed: 20.5¢ through June 30 and 23.5¢ from July 1. The charitable rate stays at 14¢. None of those apply to business miles.
What you can add on top of the rate
Publication 463 says that in addition to the standard mileage rate you can deduct business-related parking fees and tolls. It also says self-employed drivers can deduct the business share of car loan interest on Schedule C even with the standard rate: with 60% business use, 60% of the interest, and the same amount can’t be deducted twice if it also qualifies for Schedule 1-A. What you can’t add are depreciation, lease payments, repairs, gas, oil, insurance or registration fees, because the rate already covers them.
Why the dates in your log matter
The same 12,000 business miles produce a different deduction depending on when you drove them:
| Miles Jan 1 – Jun 30 | Miles Jul 1 – Dec 31 | Mileage deduction |
|---|---|---|
| 12,000 | 0 | $8,700 |
| 9,000 | 3,000 | $8,805 |
| 6,000 | 6,000 | $8,910 |
| 3,000 | 9,000 | $9,015 |
| 0 | 12,000 | $9,120 |
12,000
- Miles Jul 1 – Dec 31
- 0
- Mileage deduction
- $8,700
9,000
- Miles Jul 1 – Dec 31
- 3,000
- Mileage deduction
- $8,805
6,000
- Miles Jul 1 – Dec 31
- 6,000
- Mileage deduction
- $8,910
3,000
- Miles Jul 1 – Dec 31
- 9,000
- Mileage deduction
- $9,015
0
- Miles Jul 1 – Dec 31
- 12,000
- Mileage deduction
- $9,120
Miles × $0.725 for the first period plus miles × $0.76 for the second. Computed with the same function as our mileage calculator; parking and tolls come on top.
If your log has dates, the split is easy. If you only have a yearly total, you can’t prove the split, which is one more reason to log trips as you go.
The actual expense method
Instead of the rate, you can deduct the business percentage of what the car cost you. Publication 463 lists depreciation, lease payments, registration fees, licenses, insurance, repairs, gas, garage rent, tires, oil, tolls and parking fees. If you use the car for business and personal driving, you must divide the expenses between the two, and you can do it by miles: 12,000 business miles out of 20,000 total is 60%, so you can claim 60% of the cost of operating the car. In the example below we count business parking and tolls in full.
Depreciation is usually the largest and most complicated piece. Publication 463 says it’s subject to depreciation limits, and the rules are in Publication 463 and Publication 946.
Rules for choosing between them
From Publication 463:
- Choose the standard rate in the car’s first year if you ever want to use it. For a car you own, you must choose it in the first year the car is available for use in your business. In later years you can use either method. You make the choice by the due date of your return, including extensions, and you can’t revoke it.
- Leased car: if you use the standard rate, you must use it for the entire lease period.
- You can’t use the standard rate if you use five or more cars at the same time, or if you’ve claimed a depreciation deduction other than straight line, used MACRS, claimed a section 179 deduction or the special depreciation allowance on the car, or claimed actual car expenses after 1997 for a car you leased. Taxi-style “car for hire” use doesn’t rule it out by itself.
- Switching to actual expenses later is allowed. If the car isn’t fully depreciated, you estimate its remaining useful life and use straight-line depreciation for that period, subject to the depreciation limits. Part of the standard rate counts as depreciation (35 cents per mile for 2026, per Notice 2026-10), and it reduces the car’s basis.
- Going the other way (from actual expenses to the standard rate) is not possible for a car you own if you didn’t choose the rate in the first year, or if you’ve used MACRS, section 179 or the special depreciation allowance on it. Choosing the standard rate in year one is what keeps both options open.
Worked example: a freelance photographer
You drive 20,000 miles in 2026, 12,000 of them for business (60%): 6,000 business miles before July 1 and 6,000 after. You also pay $300 in parking and tolls on business trips. Under the actual method, your car costs for the year are gas $2,400, insurance $1,500, repairs and maintenance $800, tires $400 and registration $200. Depreciation comes to $3,000, an assumed figure for this example, which you’d work out under the Publication 946 rules.
- 1$4,350
Business miles, Jan 1 – Jun 30
6,000 × $0.725
- 2$4,560
Business miles, Jul 1 – Dec 31
6,000 × $0.76
- 3$8,910
Mileage deduction
$4,350 + $4,560
- 4$300
Business parking and tolls
- 5$9,210
Total car deduction (standard)
Illustrative figures. Rates from the IRS standard mileage rate table for 2026.
- Standard mileage rateLarger deduction$9,210
$8,910 for 12,000 miles + $300 parking and tolls
- Actual expenses$5,280
60% × $8,300 ($2,400 gas + $1,500 insurance + $800 repairs + $400 tires + $200 registration + $3,000 depreciation) + $300 parking and tolls
Illustrative figures. Depreciation is an assumed amount for this example; real depreciation depends on the car's cost, when it was placed in service and the IRS annual limits.
For this car, the standard rate wins by $3,930. Actual expenses tend to win when depreciation and running costs are high compared with the business miles driven; the last table shows where the example flips. If you still have the choice, figure it both ways, and remember the first-year rule: if you don’t pick the standard rate in the car’s first business year, you can’t use it for that car. The mileage deduction calculator works out the standard-rate side with your own miles, split between the two 2026 rates.
Car expenses go on Schedule C, so they lower your net profit, and with it both your self-employment tax and the income your QBI deduction is based on.
| Business miles | All before July 1 (72.5¢) | All from July 1 (76¢) | Spread over the year |
|---|---|---|---|
| 5,000 | $3,625 | $3,800 | $3,713 |
| 10,000 | $7,250 | $7,600 | $7,426 |
| 12,000 | $8,700 | $9,120 | $8,912 |
| 20,000 | $14,500 | $15,200 | $14,853 |
5,000
- All before July 1 (72.5¢)
- $3,625
- All from July 1 (76¢)
- $3,800
- Spread over the year
- $3,713
10,000
- All before July 1 (72.5¢)
- $7,250
- All from July 1 (76¢)
- $7,600
- Spread over the year
- $7,426
12,000
- All before July 1 (72.5¢)
- $8,700
- All from July 1 (76¢)
- $9,120
- Spread over the year
- $8,912
20,000
- All before July 1 (72.5¢)
- $14,500
- All from July 1 (76¢)
- $15,200
- Spread over the year
- $14,853
Miles × the rate for the period they were driven (Notice 2026-10, Announcement 2026-11). 'Spread over the year' splits the miles by days, 181 before July 1 and 184 after, which is what our mileage calculator assumes when you don't know the split. The example above splits 12,000 miles as 6,000 and 6,000, so it comes to $8,910. Parking and tolls come on top.
| Net profit before the deduction | SE tax saved | Income tax saved | Total |
|---|---|---|---|
| $30,000 | $1,300 | $685 | $1,985 |
| $50,000 | $1,302 | $821 | $2,123 |
| $80,000 | $1,301 | $822 | $2,123 |
| $100,000 | $1,300 | $1,507 | $2,807 |
| $150,000 | $1,301 | $1,506 | $2,807 |
$30,000
- SE tax saved
- $1,300
- Income tax saved
- $685
- Total
- $1,985
$50,000
- SE tax saved
- $1,302
- Income tax saved
- $821
- Total
- $2,123
$80,000
- SE tax saved
- $1,301
- Income tax saved
- $822
- Total
- $2,123
$100,000
- SE tax saved
- $1,300
- Income tax saved
- $1,507
- Total
- $2,807
$150,000
- SE tax saved
- $1,301
- Income tax saved
- $1,506
- Total
- $2,807
The deduction is the example's $8,910 of mileage plus $300 of parking and tolls. Tax with and without it on Schedule C, 2026 rates, no other income, from the same function as our mileage calculator. Federal only.
| Depreciation for the year | Actual-expense deduction | Standard-rate deduction | Better |
|---|---|---|---|
| $0 | $3,480 | $9,210 | Standard |
| $3,000 (the example) | $5,280 | $9,210 | Standard |
| $6,000 | $7,080 | $9,210 | Standard |
| $9,000 | $8,880 | $9,210 | Standard |
| $9,550 | $9,210 | $9,210 | Tie |
| $12,000 | $10,680 | $9,210 | Actual |
$0
- Actual-expense deduction
- $3,480
- Standard-rate deduction
- $9,210
- Better
- Standard
$3,000 (the example)
- Actual-expense deduction
- $5,280
- Standard-rate deduction
- $9,210
- Better
- Standard
$6,000
- Actual-expense deduction
- $7,080
- Standard-rate deduction
- $9,210
- Better
- Standard
$9,000
- Actual-expense deduction
- $8,880
- Standard-rate deduction
- $9,210
- Better
- Standard
$9,550
- Actual-expense deduction
- $9,210
- Standard-rate deduction
- $9,210
- Better
- Tie
$12,000
- Actual-expense deduction
- $10,680
- Standard-rate deduction
- $9,210
- Better
- Actual
Actual = 60% × ($5,300 of gas, insurance, repairs, tires and registration + depreciation) + $300 of parking and tolls. The $9,550 break-even is our arithmetic. Depreciation is an assumption: the IRS limits it for passenger cars (Publication 463), so large amounts may not be allowed.
When your miles are not deductible
- Commuting. Per Publication 463, you can’t deduct driving between your home and your main or regular place of work, however far it is, and even if you work or take business calls on the way. Parking at your regular place of work is a commuting cost too.
- No office, no home office. If you have no regular office and no office in your home, the IRS treats your first business contact in the metropolitan area as your office. The drive from home to that first stop and from your last stop home is commuting. Going from one client or customer to another is deductible.
- Home office as principal place of business. If your home office is your principal place of business, trips from home to another work location in the same business are deductible, regardless of distance.
- Personal use. Errands, trips to the gym, vacations. In the actual-expense method you split costs by miles. In the standard method you only count business miles.
- Fines. Publication 463 says you can’t deduct traffic fines.
If you drive for Uber, Lyft, DoorDash or Instacart, the same rules apply, and the miles the app reports usually aren’t your full log. Our gig driver tax guide covers that.
What the IRS wants in your mileage log
Publication 463 says you can’t deduct amounts you approximate or estimate, and that you should record business use at or near the time it happens. A log kept weekly counts as timely. Its sample mileage log (Table 5-2) has the date, destination, business purpose, odometer start and stop, miles for the trip, and running totals. A computer or app record counts as written. For 2026 the dates also decide which rate applies to each mile.
How we got these figures
The 2026 rates come from Notice 2026-10 (72.5 cents, the 35-cent depreciation part, 20.5 and 14 cents) and Announcement 2026-11 in IRB 2026-29 (76 cents and 23.5 cents from July 1, because of fuel prices), plus the IRS mileage rate table, reviewed July 28, 2026, for the 2025 rate and the 2022 and 2011 mid-year changes. The rules for choosing a method, commuting and records are from Publication 463 (2025), and the exact IRS text we relied on is kept in our working notes. We opened the IRS pages again on October 21, 2026. The tables are our own arithmetic with the same functions our mileage calculator uses, rounded to the dollar. For how we pick and check sources, see How We Research.
