Mileage Allowance: IRS Rates, Qualifying Miles, and Records

A mileage allowance is a per-mile amount the IRS lets you deduct, or an employer reimburse, for driving your personal vehicle for business, medical care, qualifying military moves, or charitable work. For 2026, the rates are 72.5 cents per mile for business, 20.5 cents per mile for medical trips and active-duty military moves, and 14 cents per mile for charitable driving.¹ Whether that translates into real money in your pocket depends on how you earn your income, which miles you drive, and how well you document them.

2026 IRS Mileage Rates

Under IRS Notice 2026-10, the rates that apply to miles driven on or after January 1, 2026, are:

Business: 72.5 cents per mile, up from 70 cents in 2025.²
Medical and military moving: 20.5 cents per mile. The moving rate is available only to active-duty military members relocating under a permanent change-of-station order.¹
Charitable: 14 cents per mile. This rate is set by federal statute and does not change from year to year.³

The business and medical rates reflect all major ownership and operating costs averaged across the national fleet, including electric and hybrid vehicles. The charitable rate covers only out-of-pocket operating costs such as gas or electricity, not depreciation.²

Tolls and parking fees tied to a qualifying trip are deductible separately, on top of the per-mile amount.⁴

Who Can Actually Claim It

Driving for work does not automatically mean you get a deduction. This is where the biggest surprises happen.

Self-Employed and Independent Contractors

If you’re self-employed, you deduct business mileage on Schedule C. The deduction reduces both your income tax and your self-employment tax, so the savings are real.⁵

W-2 Employees

If you receive a W-2, you generally cannot deduct unreimbursed mileage on your personal return. The Tax Cuts and Jobs Act eliminated the miscellaneous itemized deduction for unreimbursed employee business expenses starting in 2018, and that suspension is now permanent. If your employer does not reimburse you, you absorb the cost.

There is one clean path: your employer sets up an accountable plan that reimburses you at or below the IRS rate. Under an accountable plan, the reimbursement stays out of your gross income and off your W-2. The plan must require you to substantiate each expense, and you must return any excess reimbursement within a reasonable period.⁶ If the plan fails those tests, reimbursements are treated as taxable wages subject to income tax withholding and payroll taxes.

Medical and Charitable Drivers

Medical mileage goes on Schedule A as part of your medical expenses, and only the portion of total medical costs above 7.5% of your adjusted gross income is deductible. Charitable mileage also goes on Schedule A. Both require you to itemize, so many taxpayers who take the standard deduction see no benefit from tracking these miles.

Which Miles Qualify

The IRS draws sharp lines between deductible travel and personal driving. Getting this wrong is the fastest route to an audit adjustment.

Business Trips

Business miles include driving from one work location to another, traveling to meet clients, and trips to conferences or job sites. If you work from a home office that qualifies as your principal place of business, travel from home to any other work location in the same trade or business counts.⁷

Travel to a temporary work location qualifies as long as the assignment is realistically expected to last one year or less. Once it stretches past a year, the location becomes a regular workplace and the drive is a personal commute.⁷

The Commuting Rule

Driving from your home to your regular workplace is commuting. Distance doesn’t matter, frequency doesn’t matter, and taking business calls on the way doesn’t turn a commute into deductible travel.⁷

Medical Trips

Travel counts when the primary purpose is to receive medical care. Trips to a doctor, hospital, dentist, pharmacy, or physical therapy all qualify. A trip to a gym does not, even if your doctor recommended exercise, unless the facility is providing prescribed treatment.¹

Volunteer Driving

Miles you drive while performing services for a qualifying 501(c)(3) organization are deductible at 14 cents. You have to be doing something for the group, such as delivering meals, driving clients to appointments, or transporting supplies. Simply attending an event as a participant does not qualify.³

Standard Rate or Actual Expenses

The per-mile rate is not the only way to deduct business vehicle costs. You can instead track your actual vehicle expenses (gas, insurance, repairs, tires, registration, depreciation, lease payments, and the interest portion of a car loan) and deduct the business-use percentage of the total.

Your choice in the first year the vehicle is available for business use is close to permanent. If you want the option to use the standard mileage rate on a car you own, you have to pick it in year one. You can switch to actual expenses later if that becomes more favorable. If you start with actual expenses, you cannot go back to the standard rate for that vehicle.⁷

For a leased vehicle the rule is stricter still: if you pick the standard mileage rate, you must stay with it for the entire lease, including any renewals.⁷

You are locked out of the standard mileage rate entirely if you’ve claimed a Section 179 deduction on the vehicle, used MACRS depreciation, or operate five or more vehicles at the same time as a fleet.⁴

Which method wins depends on the car. The standard rate tends to favor high-mileage drivers with a fuel-efficient or paid-off vehicle. Actual expenses tend to win with a newer, more expensive car carrying high insurance, loan interest, and depreciation. Run both calculations before you commit, especially in that first year.

Records the IRS Expects

Federal law requires you to substantiate the amount, time, place, and business purpose of each expense.⁸ Records need to be written at or near the time of each trip. Reconstructing a year of driving from memory in April is exactly the kind of thing that gets deductions thrown out.

Each trip entry should show:

The date of the trip.
The destination, with a specific address rather than a vague label like “client meeting.”
The purpose, such as who you met or what task you performed.
The miles driven for that trip.

You also need odometer readings at the start and end of the tax year, and whenever you start or stop using the vehicle for business. Those year-end numbers let you calculate the business-use percentage of the vehicle’s total miles.

Paper logs are acceptable. So are GPS-based tracking apps that record trips automatically. The format matters less than whether the entries are detailed and contemporaneous.

Doing the Math

Once your log is clean, the calculation is simple. Multiply qualifying miles in each category by the 2026 rate:

10,000 business miles × $0.725 = $7,250
500 medical miles × $0.205 = $102.50
300 charitable miles × $0.14 = $42.00

Add qualifying tolls and parking to each total. Keep the categories separate; the rates differ and each goes on a different part of the return.

Self-employed filers put business mileage on Schedule C, Line 9, and do not also deduct depreciation or actual operating costs on top of the standard rate.⁵ Medical and charitable mileage go on Schedule A if you itemize.

The Basis Reduction Trap

Every business mile you claim at the standard rate quietly reduces your vehicle’s cost basis by a depreciation component built into the rate. For 2026, that component is 35 cents per mile.¹

Ten thousand business miles in 2026 drop your basis by $3,500. A lower basis means a larger taxable gain when you eventually sell or trade the vehicle. That does not change what your deduction is worth today, but it can produce a surprise tax bill when the car changes hands.

Penalties for Getting It Wrong

Sloppy mileage claims can trigger the accuracy-related penalty, which adds 20% of any tax underpayment caused by negligence or a substantial understatement.⁹ Fabricated logs or deliberately inflated numbers can cross into tax evasion, a felony carrying a fine of up to $100,000 and up to five years in prison.¹⁰ Good records are cheap insurance against both.

1
Internal Revenue Service. 2026 Standard Mileage Rates – Notice 2026-10
2
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile
3
Office of the Law Revision Counsel. 26 USC 170 – Charitable, Etc., Contributions and Gifts
4
Internal Revenue Service. Topic No. 510, Business Use of Car
5
Internal Revenue Service. Instructions for Schedule C (Form 1040)
6
Internal Revenue Service. Revenue Ruling 2003-106
7
Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
8
Office of the Law Revision Counsel. 26 USC 274 – Disallowance of Certain Entertainment, Etc., Expenses
9
Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments
10
Office of the Law Revision Counsel. 26 USC 7201 – Attempt to Evade or Defeat Tax