Deducting and Reimbursing Business Use of a Personal Vehicle in the United States

IRS standard mileage rates for 2026 and earlier years

All amounts below are U.S. cents per mile.

The business rate applies to eligible cars, vans, pickups, and panel trucks, including electric and hybrid vehicles. It covers costs such as fuel, repairs, insurance, and depreciation. Business parking and tolls can be accounted for separately. Do not add gasoline or the other covered running costs to a standard-mileage deduction.

The July increase does not apply retroactively to January–June travel. For an employee mileage allowance to use the higher IRS rate, both the payment and the underlying transportation expense must fall on or after July 1, 2026.

Example: business miles in both halves of 2026

Suppose you have 1,000 eligible business miles in each half of the year and calculate them using the applicable IRS rate:

• January–June: 1,000 × $0.725 = $725.
• July–December: 1,000 × $0.76 = $760.
• Total mileage amount: $1,485, before any separately eligible parking and tolls.

For an employee, this is the reimbursement amount if the employer's plan uses those rates and the payment conditions are met. For an eligible self-employed taxpayer, it is a vehicle-expense deduction, not a $1,485 tax refund.

When is employee mileage reimbursement tax-free?

Federal tax treatment depends on the reimbursement arrangement as well as the rate. Under an accountable plan, the expenses must relate to the employer's business, the employee must substantiate them within a reasonable time, and excess advances or reimbursements must be returned as required.

A documented mileage allowance within the applicable IRS rate can meet the amount-substantiation rule. You still need to show the business miles, dates, destinations, and purpose. A flat car allowance without the required accounting does not become tax-free simply because it is below an estimated mileage amount. Unsubstantiated amounts and unreturned excess payments are generally treated as wages.

Your employer's policy, employment agreement, and applicable labor law determine what must be paid. The IRS rate is not a universal wage-law minimum. Required vehicle costs must not reduce covered employees' pay below applicable minimum-wage or overtime requirements, and state expense-reimbursement rules can impose additional obligations.

Can you claim a mileage deduction yourself?

Self-employed people may deduct eligible business vehicle expenses using standard mileage or actual expenses, subject to the rules for the chosen method. If you own the vehicle and want to use standard mileage, choose it in the first year the car is available for business use. For a leased car, choosing standard mileage generally commits you to that method for the entire lease, including renewals. Prior depreciation claims and using five or more cars simultaneously can prevent use of the mileage method.

Most employees cannot claim a federal deduction for unreimbursed business mileage. A lower employer payment does not generally create a deductible shortfall. Limited exceptions exist, including qualifying reservists, performing artists, fee-basis state or local officials, and certain educator expenses. Check the rules for your category before claiming.

Ordinary commuting is personal travel. Driving from home to your regular workplace does not become business mileage because you take a work call. Trips between business locations can qualify; travel from a qualifying home office or to a temporary work location has separate conditions.

The other rates in the table also have eligibility limits:

• Medical travel: qualifying, unreimbursed transportation for medical care can be included in an itemized medical-expense deduction. Only eligible medical expenses above 7.5% of adjusted gross income are deductible.
• Moving: the deduction is restricted to qualifying active-duty military moves and, from 2026, certain intelligence-community relocations. It is not a general deduction for moving to a new job.
• Charitable travel: the 14¢ rate applies to qualifying unreimbursed driving while volunteering for an eligible organization, subject to charitable-deduction rules. It is not the business reimbursement rate.

What should a mileage log record?

Record trips as they happen, with the date, business destination, business purpose, and miles driven. Keep annual total mileage and separate business, commuting, and other personal use. Beginning and ending odometer readings help support those totals. For 2026, retain enough detail to separate mileage before and after July 1.

Keep vehicle details, reimbursement records, and receipts for separately claimed costs such as tolls and parking. If you use actual expenses, retain the underlying vehicle bills too. A mileage tracker helps collect the information; the record must still explain why each claimed trip qualifies.

Track business mileage with Motolog

Motolog helps you record trips, separate business and personal driving, and prepare mileage reports. Automatic official rates are available where supported, and custom rates let you match your reimbursement arrangement. Check the applicable period and your employer's policy or chosen tax method before submitting a report.

Explore Motolog's automatic mileage tracker. You can also compare plans and pricing.