Fri Jan 02 13:50:00 UTC 2026: News Article Summary:

The IRS is increasing the standard mileage rate for business driving in 2026 to 72.5 cents per mile, up 2.5 cents from the previous rate. The rate for medical and moving purposes will decrease slightly to 20.5 cents per mile. The charitable organization rate will remain at 14 cents. The change aims to reflect updated cost data and annual inflation adjustments. The new rates apply to all vehicle types, including electric and hybrid cars. Taxpayers can choose between using the standard mileage rate or calculating their actual vehicle expenses.

FOX Business: IRS Announces Increased Mileage Rate for Business Driving in 2026

Washington, D.C. – The Internal Revenue Service (IRS) announced this week that the standard mileage rate for business driving will increase to 72.5 cents per mile starting January 1, 2026. This represents a 2.5 cent increase from the previous rate. The agency said the adjustment reflects updated cost data and annual inflation.

Self-employed individuals, gig workers, freelancers, and small businesses who use their personal vehicles for business purposes can deduct the mileage at this new rate when filing their federal income taxes.

While the business mileage rate is increasing, the rate for medical and moving purposes (for active duty military and intelligence members) will decrease slightly to 20.5 cents per mile, down half a cent. The rate for using a vehicle for charitable purposes will remain unchanged at 14 cents per mile.

The IRS clarified that these rates apply to all vehicles, including fully-electric, hybrid, gasoline, and diesel-powered automobiles. Taxpayers also have the option to calculate the actual costs of operating their vehicle instead of using the standard mileage rate.

This announcement comes as economists predict a faster-growing U.S. economy in 2026, despite a potentially stagnant job market. The recent edition of “The Big Money Show” on FOX Business discussed factors potentially influencing the economy, including the rise of Artificial Intelligence and the potential impact of President Trump’s policies.

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