IRS Mileage Rate 2026

Who can still deduct mileage after the TCJA/OBBBA changes

The 2017 Tax Cuts and Jobs Act suspended the miscellaneous itemized deduction for unreimbursed employee business expenses (the 2%-of-AGI category), and OBBBA (P.L. 119-21, section 70110) made that suspension permanent starting with the 2026 tax law baseline. In practice, that means a typical W-2 employee who drives their own car for work and isn't reimbursed can no longer deduct that mileage at all — not on Schedule A, and there's no other line for it.

A handful of categories are carved out because their deduction was moved to an adjustment to income on Schedule 1 of Form 1040 instead of an itemized deduction, so the TCJA/OBBBA change never applies to them:

• Self-employed taxpayers. Mileage for a Schedule C or Schedule F business was never an itemized deduction — it's an ordinary business expense, untouched by the employee-expense rule.
• Armed Forces reservists. Unreimbursed travel expenses connected with reserve duty remain deductible as a Schedule 1 adjustment.
• Fee-basis state or local government officials. Officials paid wholly or partly on a fee basis keep the same adjustment.
• Qualified performing artists. A narrow group meeting the performing-artist tests under IRC section 62(a)(2)(B) also deducts as an adjustment to income, not an itemized deduction.
• Eligible educators. A separate, dollar-capped adjustment covers certain classroom expenses, including some travel.

Moving-expense mileage is even narrower: OBBBA (section 70113) made permanent the general disallowance of the moving-expense deduction, leaving it available only to active-duty members of the Armed Forces moving under military orders incident to a permanent change of station, and — added by OBBBA — certain members of the intelligence community relocating after December 31, 2025. Nobody else can use the moving-mileage rate for a 2026 move.

Source: IRS Notice 2026-10, Section 3; OBBBA (P.L. 119-21) sections 70110 and 70113.

Standard mileage vs. actual expenses — how the election works

Anyone eligible to deduct car expenses chooses between two methods: the standard mileage rate (miles × the applicable per-mile rate, plus parking and tolls), or actual expenses (the business-use percentage of everything it costs to own and run the car — gas, oil, insurance, repairs, tires, registration, lease payments or depreciation). You don't get to mix both methods for the same vehicle in the same year.

The timing rule matters more than people expect: per IRS Publication 463, if you own the car, you must choose the standard mileage rate in the first year it's available for business use. Only after that first-year election can you switch between standard and actual in later years. Choose actual expenses first, and you've locked yourself out of the standard mileage rate for that car going forward. A leased car is different again — once you use the standard rate for a leased vehicle, you must use it for the entire lease term.

Source: IRS Publication 463, "Choosing the standard mileage rate."

What the business rate covers — and what's still deductible on top

The business standard mileage rate is a single per-mile figure meant to stand in for every variable cost of running the car for business: fuel, oil, insurance, repairs and maintenance, tires, registration fees, and a built-in depreciation allowance (or, for a leased car, the lease payment). You don't separately itemize any of those costs if you use the standard rate — the per-mile figure already bundles them.

Two costs are NOT bundled into the rate and can be deducted on top of it, under either method: business-related parking fees and tolls. Parking at your regular place of work doesn't count — that's a nondeductible commuting cost regardless of which method you use.

Source: IRS Publication 463, "Standard Mileage Rate" and "Parking fees and tolls."

The depreciation component and your car's basis

Buried inside the business rate is a per-mile amount the IRS treats as depreciation, whether or not you separately claim any. For 2026 that component is 35¢ per mile, for the full year — Announcement 2026-11 revised the rate itself for July–December but didn't touch the depreciation figure set in Notice 2026-10.

This matters because every business mile you claim under the standard rate reduces your car's adjusted basis by that per-mile amount, exactly as if you'd claimed the depreciation directly. Drive 12,000 business miles in a year on the standard rate and your basis drops by $4,200.00 (12,000 miles × 35¢), even though you never filled out a depreciation schedule. That reduction shows up later — as a smaller basis to subtract from proceeds when you sell or trade in the car, and (per Publication 463) as the reason you can't also take section 179 expensing or bonus depreciation on a vehicle in the same year you use the standard mileage rate for it. Run the full life-cycle comparison on the depreciation calculator.

Source: IRS Notice 2026-10, Section 4 ("Basis Reduction Amount").

Employer reimbursement under an accountable plan

An employer can reimburse an employee's business mileage at up to the standard rate without adding a dollar of it to taxable wages — but only under an accountable plan. That requires three things: the mileage has a genuine business connection, the employee substantiates the amount, time, place and business purpose within a reasonable period, and the employee returns any excess reimbursement above the substantiated amount. Miss any of those three and the arrangement is treated as a nonaccountable plan — the whole reimbursement becomes W-2 wages, subject to withholding, even though it was calculated using the standard rate.

Reimbursing above the standard rate doesn't disqualify the plan outright, but the excess over the rate is treated the same way an unsubstantiated amount would be — it's added to wages unless the employee separately substantiates the higher actual cost.

Source: IRS Publication 463, "Accountable Plans."

Two worked examples

Sources

• IRS — Standard mileage rates
• IRS Announcement 2026-11 — revised rates from July 1
• IRS Notice 2026-10 — original 2026 rates and depreciation component
• IRS Publication 463 — Travel, Gift, and Car Expenses