The 2026 Mileage Rate Changed Mid-Year: 72.5¢, 76¢, and How to Split Your Log

On July 1, 2026, the IRS did something it had not done in four years: it changed the standard mileage rate in the middle of a tax year.

If you are tracking business miles this year, you now have two rates to deal with instead of one. Getting this wrong is not catastrophic, but it does mean either leaving money on the table or claiming a deduction you cannot support. Here is exactly how it works.

The 2026 rates, both halves

The original 2026 rates came from Notice 2026-10, released December 29, 2025. The mid-year increase came from Announcement 2026-11, which modified that notice effective July 1.

Why the IRS changed it

Fuel costs. The IRS pointed to AAA data showing regular gasoline averaged $2.819 per gallon on January 8, 2026 and $3.890 by July 15 — roughly a 38% jump over about six months.

The standard mileage rate is built on an annual study of the fixed and variable costs of operating a vehicle. When one of the big variable inputs moves that far that fast, the rate set in December stops reflecting reality. The last time this happened was mid-2022, under similar fuel conditions.

How the charitable rate escaped

The 14¢ charitable rate did not move, and it will not move next year either unless Congress acts. That rate is fixed by statute rather than set by the IRS, which is why it has been 14 cents since 1998 while the business rate has more than doubled.

It is a real disadvantage for people who drive substantially for volunteer work, and there is nothing the IRS can do about it administratively.

Splitting your log: the mechanics

You do not get to pick one rate for the whole year. Miles driven January through June get 72.5¢. Miles driven July through December get 76¢. The date of the trip controls, not the date you were paid or the date you recorded it.

Practically, that means your mileage log needs a clean break at June 30. Three ways to handle it:

• If you use an app — most mileage trackers pushed an update in July that applies the split automatically. Confirm yours did. Run a report for January–June and a separate one for July–December and check that the app is applying different rates to each.
• If you use a spreadsheet — add a rate column and populate it with a formula keyed to the trip date rather than a single hard-coded rate. This is the most common place the error shows up: one rate applied to the whole year.
• If you use paper — total the two periods separately and carry two subtotals forward.

What the change is actually worth

The increase is 3.5¢ per business mile for the back half of the year. Some concrete numbers:

That is the change in your deduction, not your refund. What it saves you depends on your bracket. A self-employed driver in the 22% bracket also paying 15.3% self-employment tax on that income is looking at roughly 37 cents of tax saved per dollar of additional deduction — so 10,000 second-half miles is worth around $130 in real money.

Not life-changing. But it costs nothing to capture, and it is the kind of thing that gets missed when someone runs a single rate across a twelve-month log.

The full-year comparison

For context on where 2026 sits historically:

A driver logging 12,000 business miles evenly across 2026 deducts about $8,910 — versus $8,400 at 2025 rates for the same driving.

Does this change the standard-vs-actual math?

For some people, yes. The standard mileage rate is meant to approximate the real cost of operating a vehicle. When the rate goes up but your actual costs did not, the standard method gets relatively more attractive — and vice versa.

The higher second-half rate slightly favors the standard method for 2026, especially for drivers with older, paid-off, fuel-efficient vehicles whose actual costs are low. If you are running a new, expensive vehicle with heavy depreciation, actual expenses may still win.

One rule to remember before you switch: if you want the option to use the standard mileage rate on a vehicle at all, you generally have to use it in the first year that vehicle is placed in service for business. Start with actual expenses and you are typically locked out of standard mileage for that vehicle’s life. Leased vehicles are stricter still — choose standard mileage and you must stay with it for the entire lease term.

What the rate does and does not cover

The standard mileage rate is meant to cover gas, oil, maintenance, repairs, tires, insurance, registration, and depreciation. You cannot deduct those separately on top of it.

You can still deduct, in addition to standard mileage:

• Parking fees for business trips
• Tolls
• The business-use portion of vehicle loan interest, if you are self-employed
• The business-use portion of personal property taxes on the vehicle

Parking and tolls are the two most commonly missed. They are genuinely additive and they add up faster than people expect in the Northeast corridor.

Frequently asked questions

What if I already filed an estimated payment using the old rate?
Nothing to correct. Estimated payments are estimates. The final rate gets applied when you file your return.

My employer reimburses at 72.5¢. Is that a problem?
Not a compliance problem, but it is now below the IRS rate for second-half miles. Reimbursement at or below the federal rate under an accountable plan stays tax-free to you; your employer is simply reimbursing less than they could. Worth raising if you drive a lot.

Do the new rates apply to 2025 returns?
No. Tax year 2025 used a flat 70¢ business rate all year, with 21¢ for medical and moving.

Will the rate reset in January 2027?
The IRS will set a fresh 2027 rate, typically announced in December. Whether it lands above or below 76¢ depends on where fuel and vehicle costs sit by then — a mid-year increase does not guarantee the next annual rate stays that high.

The bottom line

Two rates, one clean break at June 30. Check that whatever you use to track miles knows about the July 1 change, keep parking and tolls on a separate line, and remember that the trip date is what determines the rate.

Related guides

• 2026 mileage deduction calculator
• Parking and tolls: deductible on top of standard mileage
• Business miles vs. commuting miles
• The IRS-proof mileage log

This article is general information, not tax advice. Mileage rates and rules come from IRS Notice 2026-10 as modified by Announcement 2026-11; verify current figures at irs.gov or consult a qualified tax professional about your situation.