The IRS announced the standard mileage rate for 2026 is $0.725 per mile for business driving — up from $0.70 in 2025. For a driver doing 1,300 miles/month, that's $942.50/month in potential deductions or reimbursement.
Standard mileage vs actual expense method
You have two choices when deducting vehicle costs for work driving:
- Standard mileage: $0.725 × miles driven. Simple, no receipts needed.
- Actual expense: Track every receipt — gas, insurance, oil changes, registration — and deduct the business-use percentage.
If your employer reimburses you per mile
Many gig platforms and employers reimburse at the IRS rate ($0.725/mile) or close to it. In that case, your net take-home from reimbursement is:
Reimbursement − Gas − Car Payment = Your Net
This is exactly what the Drivonomics report calculates for every car — personalized to your actual miles and gas price.
The right car makes the IRS rate work for you
At $0.725/mile reimbursement and 54 MPG, a Hyundai Elantra Hybrid driver spends only $0.11/mile on gas. That leaves $0.59/mile for payment, insurance, and profit. An SUV driver at 21 MPG spends $0.28/mile on gas — leaving only $0.42/mile before payment and insurance.
What about the EV/hybrid tax credit?
The federal clean vehicle tax credit (up to $7,500 for new, $4,000 for used) was repealed effective October 1, 2025 under the FY2025 reconciliation law. As of 2026, there is no federal tax credit for purchasing a hybrid or EV. Some states (California, Colorado) still offer separate state incentives — check your state's DMV or energy office for current programs.
Note: the federal credit applied only to plug-in hybrids (PHEVs) and EVs anyway — standard hybrids like the Prius, Elantra Hybrid, and Corolla Hybrid never qualified. The mileage deduction is a separate benefit that still applies to all work driving.