Written by Kim Hopp, Payroll Specialist
For farmers, business owners, and anyone who spends significant time on the road, maintaining accurate mileage records can help maximize available tax benefits. Because the IRS updated the standard mileage rates effective July 1, 2026, taxpayers will need to distinguish between qualifying miles driven during the first and second halves of the year.
2026 mileage rates changed on July 1
For miles driven from January 1 through June 30, 2026, the standard mileage rates are:
- 72.5 cents per mile for business use
- 20.5 cents per mile for medical purposes
- 20.5 cents per mile for military moving expenses
- 14 cents per mile for charitable service
For miles driven from July 1 through December 31, 2026, the rates are:
- 76 cents per mile for business use
- 23.5 cents per mile for medical purposes
- 23.5 cents per mile for military moving expenses
- 14 cents per mile for charitable service
If you track mileage through an app or accounting system, you should verify that the rates were updated beginning July 1, 2026. The Christianson bookkeeping team assists our clients to ensure software and systems are utalizing the correct rate based on travel dates.
What qualifies under each rate?
While this is not a comprehensive list, here are some examples:
Business use
- Traveling between farm locations
- Meeting with customers, vendors or suppliers
- Picking up parts, equipment or supplies
- Visiting banks, accountants, attorneys or other professional advisors
- Attending business meetings, conferences or industry events
Medical purpose
- Doctor appointments
- Hospitals or clinics
- Dental appointments
- Other necessary medical care
Military Moving Expenses
- This rate may be used by eligible active-duty members of the Armed Forces and certain members of the intelligence community who qualify under IRS rules
Charitable service
- Volunteering for nonprofit organizations or churches
- Delivering donated goods
- Providing transportation as part of volunteer activities
The standard mileage rate is optional
You are not required to use the standard mileage method. The standard mileage rate is commonly used by self-employed individuals and businesses and may also be used for qualifying employer reimbursements. As a note, most employees cannot deduct unreimbursed business mileage on their individual tax returns.
Depending on your situation, you may instead deduct the portion of actual vehicle expenses the business uses, including fuel, insurance, repairs and maintenance, registration fees or depreciation.
The IRS rules may limit your ability to switch between the standard mileage method and the actual expense method.
For example, if you own a vehicle and want to use the standard mileage rate, the IRS generally requires that method to be selected the first year the vehicle is available for business use. If you lease a vehicle and elect the standard mileage rate, you generally must continue using that method for the entire lease period, including renewals.
Before changing methods, compare the potential tax benefit and confirm that you remain eligible to make the switch.
Good mileage records still matter
Higher mileage rates do not reduce the importance of accurate documentation. Your records should generally include the date of travel, destination, business purpose, and number of miles driven.
A log entry such as “Client meeting, Redwood Falls to Morgan, 16 miles, August 12″ provides stronger documentation than trying to reconstruct multiple months of travel at tax time.
We find that when clients document their mileage in this way, as it allows us to calculate their deduction more easily and determine more quickly which method provides the greater tax benefit. For businesses with multiple vehicles, consistently tracking mileage throughout the year with all the details can make a difficult year end process much simpler.
Businesses whose employees use personal vehicles for company business should also review their mileage reimbursement policies and systems. To apply the revised mileage rate, both the employee’s transportation expense and the employer’s reimbursement generally must occur on or after July 1, 2026.
Reviewing mileage logs, payroll and reimbursement settings now can help prevent issues at year end or if you are ever audited.
Compare your options before year-end
While the standard mileage rate offers simplicity, it is not always the most beneficial option. Vehicles with significant depreciation, insurance costs, repairs, or other operating expenses may generate a larger deduction under the actual expense method. Evaluating both approaches can help ensure you choose the option that best fits your circumstances.
At Christianson, we can help you review your vehicle expenses, mileage records, payroll settings, and reimbursement policies to determine how the 2026 mileage rate changes affect you or your business. If you need assistance with accounting, payroll, bookkeeping, financial reporting, tax planning, or other business advisory services, our team is here to help.
Contact Christianson at 888.852.5937 or fill out the form below.
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