If you drive for work, your tax deduction just got a raise. Not a big one. Real money if you actually track the miles.
The IRS bumped the standard business mileage rate to 76 cents per mile for the second half of 2026, up from 72.5 cents. The medical and moving rate went from 20.5 to 23.5 cents. Both take effect on any mile driven on or after July 1.
Mid-year mileage bumps are rare. The IRS almost always resets the rate once a year, in January, and lives with it. The last mid-year move was 2022, when gas hit five bucks a gallon. This year the trigger is the same: fuel prices spiked hard enough that the January rate was leaving drivers underwater.
The announcement came out in IRS Bulletin 2026-29, published July 13. Translation: it dropped over the weekend. Most gig drivers haven’t seen it. Half the small-business bookkeepers in the country are still deducting at the old rate.
Here’s the catch. The 76 cent rate only applies to miles you can prove. Not “around 12,000.” Actual miles, with dates, destinations, and business purpose. The IRS has been auditing mileage logs harder the last two years, and the penalty for a bad log is losing the whole deduction, not a partial haircut.
Ten thousand business miles in the second half of the year, logged clean, is $7,600 off your taxable income. At a 22% federal bracket that’s about $1,672 back. Add another few hundred if your state taxes wages. The 3.5 cent bump alone is worth $350 on those 10,000 miles compared to what you’d claim at the old rate. Not life-changing. Not nothing.
Reimbursement math is uglier. If your employer pays “the IRS rate,” they should be at 76 cents starting July 1. Plenty of them are still stamping 72.5 on expense reports because HR hasn’t caught up. Every hundred miles a week at the old rate is $18 quietly gone by year-end.
Move on three things this week.
One. Turn on a real mileage app. MileIQ, Everlance, Stride, or the tracker inside QuickBooks. Whatever tags every drive automatically and lets you swipe business or personal. Backfilling a paper log at December 30 does not survive an audit.
Two. Check your reimbursement policy. If your employer says “IRS rate” and pays 72.5, ask when they will update. Get the answer in writing. If they refuse and you file a Schedule C, the shortfall on qualifying self-employed miles is still deductible. If you are a W-2 employee, it usually is not.
Three. Tag your first-half-of-the-year miles as pre-July-1 in your log. Your 2026 return has to split them: 72.5 cents for January through June, 76 cents for July through December. If your app doesn’t handle that cleanly, export mid-year and start a fresh log for the second half.
The rate change is small. The tracking discipline behind it is what puts the money back in play.
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