The Internal Revenue Service has increased the optional standard mileage rate for business use of automobiles for 2026.

Optional standard mileage rates are used to calculate the deductible costs of operating vehicles for business, charitable, and medical purposes. Beginning Jan. 1, 2026, the standard mileage rates for the use of a car, van, pickup or panel truck is 72.5 cents per mile driven for business use, up 2.5 cents from 2025. However, the rate for medical travel will decrease by half a cent to 20.5 cents per mile.

Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle but should consult their tax preparer for specific rules and regulations.

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The mileage rate for a vehicle driven for charitable organizations remains the same as last year, namely 14 cents per mile.

While the mileage rate for charitable use is set by statute, the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes, meanwhile, is based on only the variable costs from the annual study.

Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the first year the automobile is available for business use. Then, in later years, they can use the standard mileage rate or actual expenses.

For a leased vehicle, taxpayers using the standard mileage rate must use that method for the entire lease period, including renewals.

The rates apply to fully electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.

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