The IRS has announced changes to mileage rates for 2026, impacting various groups of drivers. While some will see an increase, others will experience a slight decrease. Here's a breakdown of the new rates and their implications:
- Business Mileage: Drivers who qualify for business-related mileage will see a 2.5-cent increase, rising to 72.5 cents per mile. This reflects updated cost data and inflation adjustments.
- Medical Mileage: The rate for medical purposes will drop by 0.5 cents, falling to 20.5 cents per mile. This change affects those using their vehicles for medical appointments.
- Moving Mileage: For qualified active-duty members of the Armed Forces, the moving mileage rate will also decrease by 0.5 cents, remaining at 20.5 cents per mile. Importantly, this rate now applies to certain members of the intelligence community, as per recent legislation.
- Charitable Mileage: The rate for charitable organizations remains unchanged at 14 cents per mile, set by statute.
These rates apply to tax returns filed in 2027 and cover various vehicle types, including electric, hybrid, gasoline, and diesel-powered vehicles. It's worth noting that the IRS emphasizes the optional nature of standard mileage rates, allowing taxpayers to choose between this method and calculating actual vehicle expenses. However, only one method can be used for the same vehicle.
Despite these changes, many drivers may not claim mileage deductions on their tax returns. Companies often reimburse employees based on IRS rates, but employees don't claim deductions if reimbursed. Self-employed individuals can claim business mileage, but they must use the 2025 rate for 2025 returns. The article also highlights the complexity of mileage deductions, noting that most taxpayers cannot deduct mileage for regular moving expenses.
