The Internal Revenue Service raised the standard mileage deduction rates for 2026 to account for rising fuel costs and inflation.

The Internal Revenue Service announced a midyear adjustment to the optional 2026 standard mileage rates to help taxpayers offset the rising cost of fuel. The new rates, which are effective starting July 1, 2026, increase the business mileage deduction to 76 cents per mile from the previous 72.5 cents. Additionally, the deduction for medical and moving purposes will rise to 23.5 cents per mile, up from 20.5 cents. This adjustment marks the first time the agency has modified the mileage rate in the middle of a year since 2022. The revision comes as gasoline prices have surged significantly, driven by the Iran war and general inflation. While the charitable contribution rate remains fixed at 14 cents per mile, the new rates provide relief for those operating vehicles for business, medical, or moving purposes. The Internal Revenue Service noted that the changes are intended to provide larger deductions for taxpayers as fuel prices remain a primary factor in current inflation.

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