CashoutGlossary / Standard mileage rate
Standard mileage rate
The IRS's flat amount per business mile, used in place of actual car costs: 72.5 cents for January to June 2026 and 76 cents from July 1, 2026.
The standard mileage rate is a flat amount per business mile that the IRS lets you deduct instead of tracking your real car costs. You multiply your business miles by the rate and don't add gas, insurance or depreciation on top.
The IRS raised the business rate partway through 2026:
- January 1 to June 30, 2026: 72.5 cents a mile
- July 1 to December 31, 2026: 76 cents a mile
- 2025: 70 cents a mile
Use the rate for the date you drove. Business parking fees and tolls are deductible in addition to the rate.
The rules for using it:
- For a car you own, you must choose the standard rate in the first year the car is available for use in your business. In later years you can pick either method.
- For a leased car, once you choose it you must use it for the entire lease, including renewals.
- You can't use it if you operate five or more cars at the same time, or if you've claimed MACRS depreciation, a section 179 deduction or the special depreciation allowance on the car.
A common mistake is using one rate for all of 2026, or last year's 70 cents. The mileage calculator splits your miles by half year. The rate also only helps if your driving is deductible in the first place: most W-2 employees can't deduct unreimbursed car expenses, and commuting never counts.
Related terms
Mileage deduction · Actual expense method · Mileage log · Schedule C
