IRS Notice 2026-10 · Rev. Proc. 2019-46 · OBBBA §70110 / §70113 · TY 2026
The 2026 IRS optional standard mileage rates from Notice 2026-10 (Business 72.5c, Medical 20.5c, Moving 20.5c active-duty only, Charitable 14c). Standard vs actual expense method comparison, the OBBBA section 70110 W-2 employee disallowance, section 70113 civilian moving disallowance, Rev. Proc. 2019-46 substantiation framework, and the first-year election lock-in rule.
Want to compute your 2026 deduction instantly using the standard mileage rate or the actual expense method? Open the calculator.
Open the Mileage Deduction Calculator →The 2026 IRS optional standard mileage rates from Notice 2026-10 are 72.5 cents per mile for business use, 20.5 cents for medical care under IRC §213, 20.5 cents for moving expenses under §217(g) (restricted to active-duty Armed Forces and certain intelligence community members per OBBBA §70113(b)), and 14 cents for charitable use under §170(i). Self-employed taxpayers claim business mileage on Schedule C line 9; the four narrow above-the-line categories (reservists, fee-basis state-local officials, qualified performing artists, eligible educators) claim on Schedule 1 line 12 or 11; all other W-2 employees cannot deduct unreimbursed business mileage because OBBBA §70110 made the §67 two-percent floor disallowance permanent. The standard mileage rate competes against the actual expense method on a per-vehicle basis, with the first-year election under Rev. Proc. 2019-46 §4.04 determining the long-term path. Substantiation under IRC §274(d) requires contemporaneous logs.
IRS Notice 2026-10 (issued December 29, 2025) sets the 2026 optional standard mileage rates effective January 1, 2026. The rates apply to taxpayers using the optional standard method to compute the deductible costs of operating an automobile for business, medical, moving, or charitable purposes. Notice 2025-5 is superseded.
| Purpose | 2026 Rate | 2025 Rate | Statutory Basis |
|---|---|---|---|
| Business use | 72.5c | 70c | IRC §162; Rev. Proc. 2019-46 §4 |
| Medical care | 20.5c | 21c | IRC §213; Rev. Proc. 2019-46 §5 |
| Moving (active-duty + intelligence community) | 20.5c | 21c | IRC §217(g); OBBBA §70113 |
| Charitable use | 14c | 14c | IRC §170(i); statutory (no inflation) |
| Depreciation portion (business rate) | 35c | 33c | Rev. Proc. 2019-46 §4.04; Notice 2026-10 §4 |
| FAVR plan max standard automobile cost | $61,700 | $61,200 | Rev. Proc. 2019-46 §6.02(6); Notice 2026-10 §5 |
The business rate of 72.5 cents is up 2.5 cents from 2025. The medical and moving rates of 20.5 cents are down half a cent from 21 cents in 2025. The charitable rate of 14 cents is fixed by statute under IRC §170(i) and does not inflate. The depreciation portion of the business rate increased from 33 cents (2025) to 35 cents (2026), reflecting the higher fixed costs of vehicle ownership.
Notice 2026-10 §4 sets out the cumulative depreciation portion of the business standard mileage rate by year, which reduces vehicle basis when standard mileage is used:
Track the depreciation portion in your vehicle workpapers each year. Cumulative basis reduction cannot exceed the original cost basis (which would create negative basis); excess depreciation is recaptured at sale under §1245 (cars) or §1250 (heavy trucks).
Eligibility depends on filer status and the purpose of the mileage. Six categories of filer can claim some form of mileage deduction in 2026:
Sole proprietors filing Schedule C, single-member LLCs taxed as disregarded entities, partners reporting on Schedule E from a partnership K-1, and farmers filing Schedule F can deduct business mileage on the appropriate schedule. Business mileage reduces both income tax and self-employment tax. Schedule C line 9 is the line for car and truck expenses; Schedule F line 10 is the farmer equivalent. The standard mileage rate of 72.5 cents per mile in 2026 captures fuel, oil, insurance, maintenance, repairs, license, and a depreciation portion in a single per-mile number.
IRC §62(a)(2)(B), (C), and (E) carve out three narrow categories of W-2 worker who can deduct unreimbursed business travel as an above-the-line adjustment on Schedule 1 (Form 1040) line 12, bypassing the OBBBA §70110 misc itemized disallowance. Reservists (§62(a)(2)(E)) include any member of a reserve component of the Armed Forces who travels more than 100 miles from home to perform services. Fee-basis state and local government officials (§62(a)(2)(C)) are officials paid in whole or in part on a fee basis, not a salary. Qualified performing artists (§62(a)(2)(B)) must perform services for at least two employers in the arts and meet income and expense thresholds. All three categories file Form 2106 to compute the expense and transfer to Schedule 1 line 12.
IRC §62(a)(2)(D) permits eligible educators (K-12 teachers, instructors, counselors, principals, and aides who work at least 900 hours during a school year at an elementary or secondary school) to deduct up to $300 per year of unreimbursed classroom expenses on Schedule 1 line 11. Mileage to and from professional development courses, conferences, and supplies stores qualifies. The $300 cap is in addition to the four-category line 12 deduction (in practice, an educator might use line 11 for the $300 and would not qualify for line 12 unless also a reservist or performing artist).
Per IRC §217(g), active-duty members of the Armed Forces who move pursuant to a military order and incident to a permanent change of station can deduct moving expenses (including moving mileage at 20.5 cents per mile in 2026). OBBBA §70113(b) extended this exception to certain members of the intelligence community who move after December 31, 2025, pursuant to a change of assignment requiring relocation. The deduction is computed on Form 3903 and reported on Schedule 1 line 14.
IRC §213 permits taxpayers who itemize to deduct medical care expenses, including transportation primarily for and essential to medical care, on Schedule A line 1. The 2026 rate is 20.5 cents per mile. The deduction is subject to the 7.5 percent of AGI floor under §213(a) and only benefits filers whose total itemized deductions exceed the 2026 standard deduction ($16,100 single, $32,200 MFJ per Rev. Proc. 2025-32). Most filers do not benefit from medical mileage; high-medical-expense households with low AGI sometimes do.
IRC §170(i) permits charitable volunteers driving in service of a §170(c) qualified organization to deduct 14 cents per mile (fixed by statute, not inflated). Schedule A line 11 reports cash contributions and the §170(i) volunteer mileage; line 12 reports non-cash contributions. The deduction is subject to the §170(b) AGI percentage limits and only benefits itemizers.
Self-employed taxpayers (and the four above-the-line categories) can choose between two methods to compute the business mileage deduction. The choice has long-term consequences under the first-year election lock-in rule discussed below.
Deduction equals business miles times the IRS rate (72.5 cents per mile in 2026). The rate is intended to cover all operating costs of the vehicle: fuel, oil, insurance, repairs, maintenance, license, registration, and a depreciation portion (35 cents per mile in 2026). Parking fees and tolls related to business trips are deductible on top of the standard rate. The standard method requires only a contemporaneous mileage log; no receipts for operating costs are needed.
Deduction equals the prorated business share of all actual vehicle operating costs. Total costs include fuel, oil, insurance, repairs, maintenance, license, registration, depreciation (MACRS, §179, or §168(k) bonus for owned vehicles; lease payments for leased vehicles), and tires. Business-use percentage equals business miles divided by total annual miles. Personal-use share is not deductible. The actual method requires receipts and substantiation for all costs claimed.
Standard mileage typically wins for:
Actual expense typically wins for:
At 72.5 cents per mile, the standard rate equals the actual cost when the per-business-mile actual cost is also 72.5 cents. For a typical 25-MPG gasoline vehicle with $3.50/gallon fuel, the gas cost alone is 14 cents per mile; adding $1,500 insurance plus $1,000 maintenance plus depreciation at the IRS-implied 35 cents on 10,000 business miles equals 14 + 15 + 10 + 35 = 74 cents per mile total. Standard mileage at 72.5 cents is competitive. Move the vehicle to a $60,000 luxury SUV with $2,500 insurance, $1,800 maintenance, and accelerated bonus depreciation in year 1, and the actual cost per business mile in year 1 can exceed $1.20 per mile - the actual method wins, but only in year 1.
Rev. Proc. 2019-46 §4.04 and Treas. Reg. §1.274-5(j) establish the first-year election rule that governs which method is available for a vehicle's deductible business life:
If the standard mileage rate is used in the year the vehicle is first placed in service for business use, the taxpayer may switch to the actual expense method in any later year. However, depreciation in later years must use straight-line over the remaining estimated useful life. §168(k) bonus depreciation and the MACRS 200% declining-balance method are not available for the vehicle - those accelerated methods are forfeited by choosing standard in year 1.
If the actual expense method is used in the year the vehicle is first placed in service for business use, the standard mileage rate is unavailable for the rest of the vehicle's business life. Mid-life switching is prohibited. Choose actual in year 1 only when year-one bonus depreciation, §179 expensing, or accelerated MACRS produces a clearly larger deduction than the projected 5-year sum of standard mileage at the current rate.
Suppose a contractor buys a $58,000 heavy SUV (over 6,000 GVWR) in 2026 and drives 15,000 business miles per year. Year 1 actual method with §179 expensing ($30,500 limit for SUVs over 6,000 GVWR in 2026, indexed annually) plus §168(k) bonus depreciation on the remainder (40% in 2026 per OBBBA's bonus depreciation schedule) plus regular operating costs could produce a year-1 deduction near $35,000-$40,000. Year 1 standard method: 15,000 × 72.5c = $10,875. Year 1 winner: actual, by a wide margin.
But the lock-in extends. Years 2 through 5 under actual method allow only MACRS straight-line on the remaining basis (now reduced by year-1 expensing and bonus). Years 2 through 5 standard would have produced $10,875 each year, summing to $43,500. Plot the cumulative deduction across 5 years for both paths and pick the higher present-value sum. For very-low-mileage luxury vehicles, actual wins. For mid-mileage trucks, the answer is often standard. There is no universal right answer - run the projection.
If a taxpayer uses the standard mileage rate in the first year of a vehicle lease, the standard rate must be used for the entire lease term, including any renewal periods. Switching to the actual expense method mid-lease is prohibited. Leased vehicles never receive a depreciation deduction under the actual method (only the lease payment is deductible, prorated by business use); standard mileage often produces a larger leased-vehicle deduction. Note that §280F lease inclusion rules apply to luxury leased vehicles to recapture the depreciation benefit that would have been limited if owned.
IRC §274(d) and Treas. Reg. §1.274-5(c) impose a heightened substantiation standard for vehicle expenses. The taxpayer must maintain a contemporaneous record showing four elements for each business trip:
"Contemporaneous" means recorded at or near the time of the trip. Reconstructing a log months after the fact from credit card statements or calendar entries does not meet the contemporaneous standard. The IRS routinely disallows vehicle deductions at examination when the substantiation is a year-end reconstruction.
The IRS requires substantiation of total annual miles as well as business miles. Acceptable methods include photographing the odometer at January 1 and December 31 each year (smartphone timestamped photos are excellent), retaining vehicle service records showing odometer readings, or using vehicle telematics data from an app or built-in vehicle service. The business-use percent under the actual method (and the basis-reduction tracking under the standard method) depends on accurate total mileage.
Personal-use miles equal total annual miles minus business miles minus medical miles minus moving miles minus charitable miles. The IRS examines this residual at audit - if a self-employed taxpayer reports 18,000 business miles on a vehicle with only 18,200 total miles, the 200 miles of claimed personal use is implausible and the entire log is likely to be challenged. A reasonable personal-use share is generally 15-50% for a single-vehicle household.
The most important post-TCJA mileage rule for W-2 employees: you generally cannot deduct unreimbursed business mileage. OBBBA section 70110 (P.L. 119-21, signed July 4, 2025) made the TCJA-era suspension of all miscellaneous itemized deductions subject to the §67 two-percent of adjusted gross income floor permanent. The disallowance was originally scheduled to sunset after 2025; OBBBA cemented it indefinitely.
Form 2106 (Employee Business Expenses) is now used only by the four above-the-line categories under §62(a)(2). All other W-2 employees - including sales representatives, healthcare workers driving between clinics, employed real estate agents, employed accountants traveling to client offices, and any other employee who uses a personal vehicle for the employer's business - have no place on the personal tax return to deduct unreimbursed business mileage. The deduction does not appear on Schedule A. It does not appear on Schedule 1. It is simply lost.
Under §62(a)(2), four categories remain eligible for an above-the-line adjustment on Schedule 1 (Form 1040) line 12 (or line 11 for educators):
The proper path for most W-2 employees is to request an accountable plan mileage reimbursement from the employer at the IRS standard rate of 72.5 cents per mile (2026) under Rev. Proc. 2019-46 §7. Under an accountable plan, the reimbursement:
The employer deducts the reimbursement as a business expense. The employee submits a contemporaneous mileage log meeting §274(d) substantiation and receives reimbursement. Reimbursements above the IRS rate become taxable wages to the extent of the excess. Reimbursements below the IRS rate (or no reimbursement) leave the employee unable to recover the excess cost - and OBBBA §70110 means there is no fallback Schedule A deduction.
OBBBA §70113(a) made permanent the TCJA-era disallowance of the moving expense deduction for civilians, originally scheduled to sunset after 2025. The deduction remains available only for active-duty members of the Armed Forces on a permanent change of station under IRC §217(g). OBBBA §70113(b) added a new exception, effective for moves after December 31, 2025, for certain members of the intelligence community on a change of assignment requiring relocation.
Moving expenses incurred by civilians - moving truck rental, professional movers, packing supplies, mileage to drive personal vehicles to the new home, lodging during the move - are not deductible in 2026 or later. The disallowance applies regardless of distance, time test, or new-job employer relationship. The pre-TCJA framework (50-mile distance test, 39-week employment test for employees / 78-week for self-employed) is permanently gone for civilians.
Civilian employer-paid moving expense reimbursements are taxable wages subject to income tax and FICA withholding, included in W-2 box 1, 3, and 5. The employer can no longer treat moving reimbursements as a tax-free fringe benefit. Many employers have switched to a tax-grossed-up moving allowance: the employer pays an extra amount to cover the employee's tax on the reimbursement, which itself is also taxable - creating a circular tax pyramid that requires careful calculation.
Active-duty members of the Armed Forces who move pursuant to a military order and incident to a permanent change of station retain the moving deduction. Eligible moving expenses include moving household goods and personal effects, traveling to the new home (lodging and mileage at 20.5 cents per mile in 2026), and storage of household goods. The deduction is computed on Form 3903 and reported on Schedule 1 line 14. Members must retain orders documenting the PCS as substantiation.
For moves after December 31, 2025, certain members of the intelligence community on a change of assignment that requires relocation may deduct moving expenses on the same basis as §217(g) Armed Forces members. The intelligence community is defined by reference to executive branch agencies (CIA, NSA, DIA, etc., and components of the State and Defense Departments). Civilian DoD employees who are not in the intelligence community do not qualify under this exception.
The standard mileage rate has a built-in depreciation component (35 cents per mile in 2026; lower for earlier years) that cumulatively reduces the vehicle's adjusted basis. When the vehicle is sold, the reduced basis governs gain or loss recognition, and any gain attributable to the cumulative standard-method depreciation is recaptured as ordinary income under §1245 (cars) or §1250 (trucks over 6,000 GVWR).
A self-employed taxpayer buys a $40,000 Honda CR-V on January 1, 2023, and uses it 80% for business at 15,000 business miles per year for four years (2023-2026) using the standard mileage rate. Annual depreciation portion under each year's rate:
Cumulative basis reduction: $18,900. Adjusted basis at end of 2026: $40,000 - $18,900 = $21,100. If the taxpayer sells the vehicle on January 1, 2027, for $24,000, the realized gain is $24,000 - $21,100 = $2,900. The entire $2,900 is ordinary income (depreciation recapture) under §1245, reported on Form 4797. No capital gains treatment is available.
If cumulative depreciation under the standard rate would exceed the original basis (common for very high-mileage vehicles), basis is reduced to zero - never below. Subsequent standard mileage continues to be deductible at the full rate, but the vehicle has zero remaining basis for sale purposes. A sale for any amount produces 100% ordinary recapture gain.
Maintain a vehicle workpaper showing the cumulative depreciation portion year-by-year. The IRS does not require this on the return itself, but at examination or at sale you will need it. The depreciation portion is also relevant for state tax conformity - some states do not conform to the federal standard mileage rate's implied depreciation, requiring separate state-method computations.
| Filer / Purpose | Form / Schedule | Line | Tax Effect |
|---|---|---|---|
| Self-employed business (Schedule C) | Schedule C | Line 9 - Car and truck expenses | Reduces income tax + SE tax |
| Farmer business (Schedule F) | Schedule F | Line 10 - Car and truck expenses | Reduces income tax + SE tax |
| Reservist, performing artist, fee-basis official | Form 2106 + Schedule 1 | Line 12 - Certain business expenses | Above-the-line; reduces income tax |
| Eligible educator | Schedule 1 | Line 11 - Educator expenses ($300 cap) | Above-the-line; reduces income tax |
| Active-duty military / intelligence community (moving) | Form 3903 + Schedule 1 | Line 14 - Moving expenses | Above-the-line; reduces income tax |
| Medical mileage (itemizer) | Schedule A | Line 1 - Medical and dental expenses | Itemize; 7.5% AGI floor |
| Charitable volunteer mileage (itemizer) | Schedule A | Line 11 - Cash contributions | Itemize; §170(b) AGI limit |
| W-2 employee (other than four categories) | (no deduction) | OBBBA §70110 permanent disallowance | $0 - seek accountable plan |
The routing matters because some lines produce SE tax savings (Schedule C / F) and others do not (Schedule 1 / Schedule A). For a self-employed taxpayer in the 22% federal bracket, business mileage worth $10,000 saves $2,200 income tax + roughly $1,413 SE tax (15.3% on net SE earnings, less the deductible half-of-SE-tax adjustment), totaling about $3,613 federal benefit. The same $10,000 routed through Schedule 1 line 12 saves only $2,200 income tax. The same $10,000 routed through Schedule A line 1 may save nothing if total medical expenses do not exceed the 7.5% AGI floor or if total itemized does not exceed the standard deduction.
The single most expensive mileage error I see at intake is the contractor who buys an expensive truck mid-year, claims year-one bonus depreciation under the actual method to maximize the year-one deduction, and then drives high mileage in years 2-5 only to discover the vehicle is permanently locked out of the standard mileage rate. A 2026 Ford F-150 Platinum at $72,000 with 40% bonus depreciation under OBBBA's extended schedule plus §179 expensing produces a year-1 deduction near $50,000. At 22% marginal rate plus 15.3% SE tax, that is roughly $18,650 of year-1 tax savings - real money. But the lock-in means years 2-5 must use actual method with straight-line MACRS on the remaining basis (now mostly zero after year 1), which produces tiny annual deductions. Meanwhile, at 20,000 business miles per year for years 2-5 the standard rate would have produced 20,000 × 72.5c = $14,500 per year, totaling $58,000 across years 2-5 - $26,680 of additional tax savings over those four years. The year-1 actual election cost the taxpayer roughly $8,000 net present value. The correct analysis is a 5-year DCF, not a year-1 maximization. The second-most expensive error is the W-2 sales rep who assumes Schedule A still works post-2025 because TCJA was "supposed to sunset." OBBBA §70110 made the disallowance permanent. The sales rep with 25,000 unreimbursed business miles per year at 72.5c is owed $18,125 in employer reimbursement - if the employer refuses, the entire amount is a hidden pay cut absorbed after-tax. Push back at hiring and at annual review; the IRS rate is not optional from the employee's economic perspective.
Priya bought a 2026 Toyota Camry Hybrid for $32,000 on January 1, 2026, primarily to drive for Uber and DoorDash. She drives 28,000 total miles in 2026, of which 22,000 are platform business miles (78.6% business use) and 6,000 are personal. Her actual operating costs are: $1,950 gas, $1,700 insurance, $850 maintenance, $250 license/registration. Her marginal federal rate is 22% and her net SE earnings sit below the 2026 SS wage base ($184,500).
Standard mileage method: 22,000 business miles × 72.5c = $15,950 deduction. Federal income tax savings = $15,950 × 22% = $3,509. SE tax savings = $15,950 × 92.35% × 15.3% = $2,253. Combined year-1 federal tax savings: $5,762.
Actual expense method, year-1 election with bonus depreciation: Total operating costs (gas + insurance + repairs + registration) = $4,750. Year-1 depreciation under MACRS 5-year property + §168(k) bonus (40% in 2026 per OBBBA extension) on a sedan: regular MACRS first-year rate (mid-year convention) is 20%; bonus depreciation captures 40% of remaining basis after §179 (no §179 for vehicles under 6,000 GVWR; sedan is not heavy enough). On $32,000: 20% MACRS = $6,400; bonus on remaining $25,600 = $10,240; total year-1 depreciation = $16,640, subject to the §280F luxury vehicle limit which caps year-1 depreciation at $12,200 for passenger autos in 2026 (indexed annually). After §280F cap: year-1 depreciation = $12,200. Total year-1 vehicle costs = $4,750 + $12,200 = $16,950. Prorated by 78.6% business use = $13,323 deduction. Federal income tax + SE tax savings: $13,323 × (22% + 14.13%) = $4,817.
Year-1 winner: Standard mileage ($15,950 vs $13,323 = $2,627 advantage). Even with the year-1 bonus depreciation available under OBBBA, the §280F luxury vehicle cap on passenger autos restricts the actual method enough that the 22,000-mile standard rate wins. The standard election also preserves Priya's flexibility to switch to actual in year 2-5 if her mileage drops significantly.
What if Priya bought a heavy SUV instead? If she had bought a 6,500-pound GVWR SUV (e.g., a Toyota Sequoia) for $52,000 instead, §179 expensing up to $30,500 (2026 SUV limit, indexed annually) plus §168(k) bonus on the remainder could produce year-1 depreciation near $39,000, prorated to 78.6% = $30,650. Plus $4,750 operating costs prorated = $3,734. Year-1 actual deduction = $34,384. Year-1 winner: actual, by a wide margin. But the lock-in means years 2-5 must use actual method with much lower MACRS depreciation. Run the 5-year DCF carefully.
Compare standard vs actual side-by-side for your 2026 mileage and operating costs, with the OBBBA W-2 disallowance flag and first-year election warning built in.
Open the Mileage Deduction Calculator →Report business mileage on Schedule C line 9 (or Schedule F line 10 for farmers). Use the calculator to compare standard vs actual side-by-side. For high-mileage drivers (10,000+ miles per year) the standard rate at 72.5c usually wins. The deduction reduces both income tax and SE tax. Run the Self-Employment Tax Calculator to see combined federal tax savings.
Consider actual expense method in year 1 to claim §179 expensing (up to $30,500 for SUVs over 6,000 GVWR in 2026) plus §168(k) bonus depreciation (40% in 2026 per OBBBA's extended schedule). Year-1 deduction can exceed $40,000. But the lock-in is permanent - run a 5-year DCF before electing. If projected years 2-5 mileage is high, standard mileage in year 1 may produce a larger 5-year total benefit. Read the first-year election section above.
You cannot deduct the mileage on your personal return unless you fall in one of the four narrow above-the-line categories (reservist, fee-basis state-local official, qualified performing artist, eligible educator). OBBBA §70110 made the disallowance permanent. The correct response is to request an accountable plan mileage reimbursement from your employer at 72.5c per mile - the reimbursement is excluded from W-2 wages with no income or FICA tax. If the employer refuses, the mileage cost is a hidden pay cut absorbed after-tax. Push back at hiring or at annual review.
Medical mileage (20.5c per mile in 2026) is deducted on Schedule A line 1 subject to the 7.5% AGI floor - you must itemize and your total medical expenses must exceed 7.5% of AGI to benefit. Moving mileage (20.5c) is deductible only for active-duty Armed Forces and intelligence community members on Form 3903 / Schedule 1 line 14. Charitable mileage (14c statutory) goes on Schedule A line 11. Use the Itemize vs Standard Deduction Calculator first to confirm itemizing beats the 2026 standard deduction ($16,100 single / $32,200 MFJ).
This guide is for educational and illustrative purposes only. It does not constitute tax, legal, or financial advice. The mileage deduction interacts with depreciation recapture under §1245 / §1250, the §280F luxury vehicle limits, the §168(k) bonus depreciation schedule extended by OBBBA, §179 expensing limits, the §163(h)(4) auto loan interest deduction, fleet rules under Rev. Proc. 2019-46 §4.05, the family member and related party rules, and state income tax conformity issues that this guide does not fully model. Consult a qualified tax professional before booking large vehicle deductions, especially in the first year of vehicle ownership where the election decision is irrevocable. Tax laws are subject to change.