Every year, the IRS releases standard mileage rates for tax deduction and reimbursement purposes. Many businesses use the federal business mileage rate to reimburse employees who use personal vehicles for work. This guide explains the current IRS mileage rate for 2026, how it applies to business reimbursement, and why employers should track mileage accurately.
Quick Answer: What Is the Current IRS Mileage Rate?
The current IRS business mileage rate for 2026 is 72.5 cents per mile for business miles driven January 1 through June 30 and 76 cents per mile for business miles driven July 1 through December 31.
The current medical and qualified moving rate is 20.5 cents per mile for January 1 through June 30 and 23.5 cents per mile for July 1 through December 31. The charitable mileage rate remains 14 cents per mile.
Employers should apply the correct rate based on when the business miles were driven, not only when reimbursement is processed.
The Current IRS Mileage Rate for 2026
For 2026, the IRS standard mileage rates are:
- Business: 72.5 cents per mile for miles driven January 1 through June 30, 2026
- Business: 76 cents per mile for miles driven July 1 through December 31, 2026
- Medical or qualified moving: 20.5 cents per mile for miles driven January 1 through June 30, 2026
- Medical or qualified moving: 23.5 cents per mile for miles driven July 1 through December 31, 2026
- Charitable service: 14 cents per mile
The business mileage rate is the benchmark most employers use to reimburse employees who drive a personal vehicle for work. Self-employed workers may also use the business rate to calculate eligible business mileage deductions.
What Is the Purpose of the Current Mileage Rates?
The IRS standard mileage rates help taxpayers and businesses estimate the deductible or reimbursable cost of using a vehicle for approved purposes. For employers, the business mileage rate is often used as a simple benchmark for employee mileage reimbursement.
However, the IRS mileage rate is a national average. It may not fully reflect every employee’s fuel costs, insurance premiums, maintenance costs, depreciation, mileage level, or location. Employers should review whether the IRS rate, a company-set rate, actual expense reimbursement, or FAVR is the best fit for their workforce.
How Do You Record Mileage for Taxes or Reimbursement?
Mileage records should show the date, destination, business purpose, and miles driven for each trip. Self-employed workers may use those records to support business mileage deductions, while employers may use them to review and approve employee mileage reimbursement.
For 2026, taxpayers and employers should apply the mileage rate that matches when the miles were driven. Business miles driven January 1 through June 30 use the first-half 2026 rate, while business miles driven July 1 through December 31 use the second-half 2026 rate.
Employees and businesses can use a mileage log, a spreadsheet, or a mileage-tracking app to document business miles. A mileage app can make it easier to separate business and personal trips, reduce manual errors, and maintain reimbursement records.
History of IRS Standard Mileage Rates
Each year, the IRS releases standard mileage rates for business, medical, moving, and charitable mileage. In some years, the IRS may adjust the rates midyear in response to major cost changes.
Recent IRS business mileage rates include:
- 2026, July–December: 76 cents per mile
- 2026, January–June: 72.5 cents per mile
- 2025: 70 cents per mile
- 2024: 67 cents per mile
- 2023: 65.5 cents per mile
- 2022, July–December: 62.5 cents per mile
- 2022, January–June: 58.5 cents per mile
- 2021: 56 cents per mile
The IRS made midyear rate adjustments in both 2022 and 2026, which shows why employers should verify the correct rate for the date the miles were driven.
Tools for Mileage Tracking
Whether mileage is used for tax deductions, employee reimbursement, or internal reporting, accurate records are essential. A mileage log should include the date, destination, business purpose, and business miles driven.
Some employees use spreadsheets or mileage templates, but manual logs can be time-consuming and harder to verify. A mileage tracking app can help capture trips, separate business and personal miles, and create records for reimbursement review.
Mileage Tracking Apps to Consider
mBurse offers tools that can support mileage tracking, reimbursement review, and program administration:
- mLog: A mileage tracking app designed to help employees capture and classify business miles.
- mBurse Manager: A platform for reviewing mileage records, managing reimbursement data, and supporting program administration.
The right tool depends on whether your organization needs basic mileage capture, manager approval workflows, reimbursement reporting, or broader vehicle-program administration.
Mileage Reimbursement Rates for 2026 and Beyond
Paying the current IRS mileage rate makes sense for many businesses because it is simple, familiar, and easy to calculate. However, the IRS rate is still a national benchmark. It may not reflect every employee’s location, mileage level, insurance costs, fuel prices, maintenance expenses, depreciation, or vehicle type.
Employers should review mileage reimbursement rates regularly, especially when fuel prices, insurance costs, employee territories, or annual mileage patterns change.
Shortcomings of the Current IRS Mileage Rate
A standard mileage rate does not adjust by region, role, vehicle cost, or mileage level. Employees in high-cost regions may have higher insurance, fuel, maintenance, registration, or depreciation expenses than employees in lower-cost areas.
A single cents-per-mile rate can also create reimbursement gaps for employees who drive much more or much less than the assumptions behind a national average. That does not mean the IRS mileage rate is wrong. It means employers should confirm whether it is the right reimbursement method for their workforce.
FAVR as an Alternative to the IRS Mileage Rate
FAVR, or Fixed and Variable Rate reimbursement, is an IRS-recognized method that separates fixed vehicle costs from variable vehicle costs. Fixed costs may include insurance, depreciation, registration, and taxes. Variable costs may include fuel, maintenance, tires, and mileage-based operating expenses.
Because FAVR can account for mileage, location, and vehicle-cost assumptions, it may be more accurate than one national cents-per-mile rate for organizations with employees across different territories or mileage levels.
FAVR is not the right fit for every organization, but it is worth evaluating when a standard mileage rate creates overpayment, underpayment, or tax-efficiency concerns.
FAQs About the Current IRS Mileage Rate
What is the current IRS mileage rate for 2026?
The current IRS business mileage rate for 2026 is 72.5 cents per mile for business miles driven January 1 through June 30 and 76 cents per mile for business miles driven July 1 through December 31.
Why did the IRS mileage rate change midyear in 2026?
The IRS adjusted the second-half 2026 mileage rate after increases in fuel prices. Employers should apply the correct rate based on the date the miles were driven.
What is the 2026 medical and moving mileage rate?
The 2026 medical and qualified moving rate is 20.5 cents per mile for miles driven January 1 through June 30 and 23.5 cents per mile for miles driven July 1 through December 31. Moving mileage deductions are limited to eligible taxpayers.
What is the 2026 charitable mileage rate?
The charitable mileage rate for 2026 is 14 cents per mile. Unlike the business mileage rate, the charitable mileage rate is set by statute and did not change midyear.
Do employers have to use the IRS mileage rate?
Employers do not always have to use the IRS mileage rate, but they should make sure their reimbursement method is properly documented, tax-compliant, and sufficient under applicable reimbursement rules.
Is FAVR different from the IRS mileage rate?
Yes. The IRS mileage rate is a single cents-per-mile benchmark. FAVR separates fixed vehicle costs, such as insurance and depreciation, from variable costs, such as fuel and maintenance. This can make reimbursement more accurate for employees in different locations or mileage bands.
Not sure whether the current IRS mileage rate is the right reimbursement method for your business? mBurse can help you compare the IRS rate against mileage patterns, location-sensitive vehicle costs, and FAVR options to identify whether your program may be overpaying, underpaying, or creating unnecessary tax waste.
