The math, one step at a time
In 2026 the IRS used two business rates. Miles you drove from January 1 to June 30 count at 72.5¢. Miles from July 1 to December 31 count at 76¢, because the IRS raised the rate mid-year when fuel got more expensive. So the first thing to do is split your log at July 1.
Say you drove 10,000 business miles, spread evenly through the year:
- January–June: 5,000 miles × $0.725 = $3,625
- July–December: 5,000 miles × $0.76 = $3,800
- Total: $3,625 + $3,800 = $7,425
That works out to an average of 74.25¢ a mile. If you are self-employed, $7,425 is the amount you deduct on Schedule C. If you are an employee, it is the most your employer can pay you tax-free for those miles under an accountable plan.
Nearby amounts
Not exactly 10,000? Find the line closest to your own miles. The last column assumes half the miles were driven before July 1 and half after.
| Business miles | All Jan–Jun (72.5¢) | All Jul–Dec (76¢) | Split evenly |
|---|---|---|---|
| 2,500 | $1,812.50 | $1,900.00 | $1,856.25 |
| 5,000 | $3,625.00 | $3,800.00 | $3,712.50 |
| 7,500 | $5,437.50 | $5,700.00 | $5,568.75 |
| 10,000 | $7,250.00 | $7,600.00 | $7,425.00 |
| 12,000 | $8,700.00 | $9,120.00 | $8,910.00 |
| 15,000 | $10,875.00 | $11,400.00 | $11,137.50 |
| 20,000 | $14,500.00 | $15,200.00 | $14,850.00 |
| 25,000 | $18,125.00 | $19,000.00 | $18,562.50 |
Is the standard rate the better choice?
The calculator above also checks the other option, called the actual-expense method. With the example car (30 MPG, gas at $4.153, $6,850 a year for insurance, repairs, fees and depreciation, 15,000 total miles), the car costs about 59.5¢ a mile to run. Two-thirds of that is business use, so the actual-expense deduction is about $5,951. The standard rate gives $1,474 more, and you don’t need to keep fuel receipts.
The actual method tends to win only when a car is expensive to own — a new truck with big depreciation, high insurance, or a lot of repairs. Change the numbers in the “Actual expenses” section to test your own car.
A few friendly reminders
- Keep a simple log. Date, where you went, why, and the miles. A phone app or a notebook both work.
- Commuting doesn’t count. Driving from home to your regular workplace is personal, even if it is far.
- Parking and tolls are extra. Business parking fees and tolls can be added on top of the $7,425.
- Employees: unreimbursed mileage generally can’t be deducted on your federal return, so ask your employer to reimburse you at the IRS rate.
FAQ
How much is 10,000 business miles worth in 2026?
$7,425 if you drove 5,000 miles before July 1 and 5,000 after (5,000 × 72.5¢ + 5,000 × 76¢). If all 10,000 were driven January–June it is $7,250; if all were July–December it is $7,600.
Do I really need to split my miles at July 1?
Yes. IRS Announcement 2026-11 raised the business rate to 76¢ only for miles driven on or after July 1, 2026. Your mileage log already has the dates, so just add up each half separately.
Is a $7,425 mileage reimbursement taxable?
No, if your employer pays it under an accountable plan — you report the business purpose and miles, and the payment is not more than the IRS rate. Then it is not included in your wages.
Sources (checked 5 November 2026): IRS news release IR-2025-128 and Notice 2026-10 (irs.gov/newsroom/irs-sets-2026-business-standard-mileage-rate-at-725-cents-per-mile-up-25-cents); IRS Announcement 2026-11 (mid-year increase effective July 1, 2026), confirmed by Journal of Accountancy and Grant Thornton (July 2026); EPA combined MPG/MPGe for model year 2026 (fueleconomy.gov data, via mpgbuddy.com); EIA weekly retail gasoline price $4.153 for November 2, 2026 (released November 3); EIA Electric Power Monthly table 5.3, U.S. residential 18.16¢/kWh for August 2026.