Blog · 14 October 2026

Standard Mileage Rates 2026: IRS Raises Business Rate to 76 Cents for July–December — What US CPA Firms Should Tell Clients

By Keshav Bansal, CA

Standard mileage rates 2026 just changed mid-year. IRS Announcement 2026-11, published in Internal Revenue Bulletin 2026-29, raises the optional business rate to 76 cents per mile for July 1 through December 31, 2026, and lifts the medical and moving rates to 23.5 cents. The announcement modifies Notice 2026-10 (the January rates). For US CPA firms, that means split-year mileage logs, updated accountable-plan rates, and clear client messaging before third- and fourth-quarter reimbursements hit the books.

What Announcement 2026-11 sets for July–December 2026

Per Announcement 2026-11 in IRB 2026-29, which modifies Notice 2026-10, the optional standard mileage rates for use in computing the deductible costs of operating an automobile for business, medical, or moving purposes for travel on or after July 1, 2026 are:

• Business: 76 cents per mile (July 1–December 31, 2026)
• Medical and moving: 23.5 cents per mile (July 1–December 31, 2026)
• Charitable: 14 cents per mile (unchanged; fixed by IRC §170(i))

The IRS cites recent increases in fuel price as the reason for the mid-year adjustment. The new rates apply to deductible transportation expenses paid or incurred on or after July 1, 2026, and to mileage allowances paid to an employee on or after July 1, 2026 and for transportation expenses paid or incurred by the employee on or after July 1, 2026. Notice 2026-10 rates continue to apply to expenses paid or incurred before July 1, 2026.

January–June 2026 rates still in force for the first half

Under Notice 2026-10 (and related IRS newsroom guidance for the January rates), the first-half 2026 optional rates were:

• Business: 72.5 cents per mile (January 1–June 30, 2026)
• Medical and moving: 20.5 cents per mile (January 1–June 30, 2026)
• Charitable: 14 cents per mile

A client who drove for business all year therefore needs two rate periods in the mileage log: 72.5¢ through June 30 and 76¢ from July 1. Do not average the rates or apply 76¢ to first-half miles.

Standard mileage vs actual expenses

The standard mileage rate is an optional simplification. Taxpayers who qualify may instead deduct actual automobile expenses (fuel, oil, repairs, tires, insurance, registration, depreciation or lease payments, and similar costs) allocated to business use. Once a taxpayer uses the standard mileage method for a vehicle placed in service that year, switching later years can carry depreciation and basis consequences—so the first-year method choice still matters. For most Schedule C sole proprietors with modest business driving, the optional rate remains the cleaner workpaper.

Self-employed individuals generally claim business mileage on Schedule C. By contrast, W-2 employees generally cannot deduct unreimbursed employee business expenses: OBBBA made permanent the disallowance of miscellaneous itemized deductions subject to the 2% floor under §67. That puts pressure on employers to reimburse under an accountable plan rather than leaving drivers to itemize.

Accountable plans, medical mileage and moving limits

• Accountable-plan reimbursements that meet the business-connection, substantiation and return-of-excess rules are generally excluded from the employee’s wages. Update plan rate tables to 76¢ for post–June 30 business miles so payroll does not under-reimburse (or create taxable excess issues) in the second half of 2026.
• Medical mileage at 23.5¢ (second half) is only useful if the taxpayer itemizes and medical expenses exceed the 7.5% of AGI floor. Flag it on organizers; do not assume every medical trip produces a deductible dime.
• Moving mileage at the medical/moving rate remains narrowly available. The moving-expense deduction under §217 is limited largely to members of the Armed Forces (and certain intelligence-community moves under §217(g)). Most civilian clients still cannot deduct a household move.
• Charitable mileage stays at the statutory 14¢ under §170(i)—Announcement 2026-11 does not change it.

What US CPA firms should tell clients now

• Split the 2026 log. Require date, miles, purpose, and starting/ending locations, with a clear break at July 1 so first-half miles stay at Notice 2026-10 rates and second-half miles use Announcement 2026-11.
• Refresh accountable-plan rates before July reimbursements are processed; dual-condition language in the announcement means both the payment date and the expense date must be on or after July 1 for the new allowance rate.
• Separate business, medical, moving and charity columns. Mixing purposes in one daily total is how IRSs and reviewers reject logs.
• Remind W-2 drivers that unreimbursed employee travel is generally nondeductible; negotiate reimbursement instead of relying on Schedule A.
• Tie mileage workpapers to year-end capacity. Extension filers and cleanup files still need substantiation—keep the October 15 extension deadline checklist and your QBO cleanup handoff notes aligned with mileage exports from the books.

Contractor and 1099 payee travel can also surface when you review vendor files against the Form 1099-NEC $2,000 threshold guidance—mileage reimbursements and contractor travel invoices should not be conflated with reportable nonemployee compensation.

A short firm checklist for the rest of 2026

• Update organizers and mileage templates with the July 1 rate change and a second-half column.
• Send a one-page client note citing Announcement 2026-11 / IRB 2026-29 and Notice 2026-10 so clients do not invent their own blended rate.
• Recompute sample accountable-plan vouchers for July–December at 76¢ and confirm payroll coding stays nontaxable when rules are met.
• For family or related-party cash flows that look like loans rather than reimbursements, keep AFR and §7872 questions separate—see AFR rates October 2026 and below-market family loans.

Where this fits for Tax Brew readers

Mileage is routine until the IRS moves the rate mid-year. Announcement 2026-11 is a documentation and process story as much as a cents-per-mile story: split logs, updated plans, and clear employee vs self-employed messaging.

If mileage workpapers, Schedule C drafts or accountable-plan reconciliations are stretching your team, outsourced tax prep and bookkeeping support for US CPA firms can take the data gathering and draft schedules while your signing professionals keep the judgment calls. Email info@taxbrewglobal.com.

Check current IRS guidance: this article summarizes Announcement 2026-11 (IRB 2026-29; modifies Notice 2026-10) and the January–June 2026 rates from Notice 2026-10 / IRS newsroom materials as described in the sources named above (IRB page at irs.gov/irb/2026-29_irb; Notice PDF at irs.gov/pub/irs-drop/n-26-10.pdf). Optional standard mileage rates can change; confirm current IRS guidance, Code sections and plan rules before advising clients. This is general information, not tax or legal advice. Sources as of 14 October 2026.