Updated January 2026

IRS Standard Mileage Rate 2026

$0.725 per mile

Up from $0.70/mile in 2025 · Effective January 1, 2026

The IRS increased the business mileage rate 2.5 cents for 2026. Here's what that means for your taxes — and which car makes that rate work hardest for you.

Calculate My Exact Deduction

Quick deduction calculator

Enter your monthly business miles to see your 2026 IRS deduction at the $0.725/mile rate.

Monthly business miles

Tax bracket

$942.50/mo

Annual deduction: $11,310 · Tax savings: $2,488/yr

Standard mileage deduction at $0.725/mile. Consult a tax professional for your specific situation.

IRS mileage rate history

The standard mileage rate changes annually based on fuel costs and vehicle operating expenses as studied by the IRS.

Year	Business Rate	Change
2026 (current)	$0.725/mile	+$0.025
2025	$0.70/mile	+$0.03
2024	$0.67/mile	+$0.015
2023	$0.655/mile	+$0.03
2022	$0.625/mile	+$0.04 (mid-year adj.)

The rate has increased $0.10/mile since 2022. At 20,000 miles/year, that's an additional $2,000 in annual deductions compared to 3 years ago.

Who benefits most from the 2026 rate

$13,195/yr

Real estate agents

Avg 18,200 miles/year. The rate increase adds $455 in annual deductions vs 2025.

$18,125/yr

Field sales reps

Avg 25,000 miles/year. The 2026 rate increase adds $625 vs 2025.

$11,310/yr

Gig workers (DoorDash/Uber)

Avg 1,300 miles/month. Every delivery mile is deductible at $0.725.

$9,425/yr

Amazon Flex drivers

Avg 1,083 miles/month. Flex miles qualify just like any other business driving.

Standard mileage vs. actual expense: which wins?

You must choose one method per vehicle, per year (with some restrictions). Here's the comparison:

Standard mileage ($0.725/mile)

Multiply your business miles by $0.725 — that's your deduction
No receipts needed beyond a mileage log
Cannot be used if you've claimed depreciation (MACRS) on the vehicle
Best for: hybrid and EV drivers whose actual gas cost is far below the IRS rate

Actual expense method

Track every receipt: gas, insurance, oil changes, tires, registration, loan interest
Deduct the business-use percentage of total costs
Can include depreciation deduction
Best for: high-cost vehicles where actual operating costs exceed the standard rate

For most hybrid drivers, standard mileage wins by a wide margin. A Toyota Prius costs about $0.14/mile to operate on gas. The IRS gives you $0.725/mile. You pocket $0.585/mile in "profit" from the deduction that doesn't reflect your actual cost. The actual expense method would give you far less.

The hybrid advantage at $0.725/mile

At 1,300 miles/month and $0.725/mile:

Prius (57 MPG): Actual gas cost = $106/mo. Deduction = $942/mo. Net benefit = $836/mo.
Elantra Hybrid (54 MPG): Actual gas = $112/mo. Deduction = $942/mo. Net benefit = $830/mo.
Chevy Traverse (21 MPG): Actual gas = $279/mo. Deduction = $942/mo. Net benefit = $663/mo.

The hybrid driver keeps $173/more per month from the same mileage deduction — just because their car is efficient.

How to track your miles (IRS-compliant)

The IRS requires a contemporaneous mileage log — meaning you must record trips as they happen, not reconstruct them at tax time. Your log must include:

Date of each trip
Starting and ending odometer readings (or total miles)
Business purpose of each trip
Destination

Recommended apps: MileIQ ($5.99/mo, automatic GPS tracking), Everlance (free tier available), or Stride (free, popular with gig workers). All produce IRS-compliant reports. At $0.725/mile, even a $6/month app pays for itself after logging just 9 miles.

See which car makes your mileage deduction work hardest

At $0.725/mile, your car choice determines how much of that deduction becomes real profit. A Prius driver keeps far more than a gas SUV driver at identical mileage. Get your free personalized breakdown.

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20 cars · 5 model years · Personalized to your miles and gas price