Key takeaways
- The IRS raised the 2026 business rate mid-year: 72.5 cents per mile from January 1 and 76 cents from July 1, 2026. Rates are normally set each December for the next year.
- Reimbursement at or below the IRS rate, backed by a mileage log, isn’t taxable income.
- Driving from home to your regular workplace is commuting, which is never deductible or reimbursable as business mileage.
- With the standard rate you don’t need gas receipts, but you do need a mileage log. Parking and tolls are claimed separately with receipts.
What is mileage reimbursement?
When you drive your own car to a client site, a supplier or a job, you’re paying for fuel, wear, insurance and depreciation on behalf of the business. Mileage reimbursement pays that back. The standard approach is simple: business miles × rate per mile.
For self-employed people there’s no employer to reimburse you, but the same calculation becomes a tax deduction on Schedule C. Either way, the record that makes it work is the same: a mileage log.
Current IRS standard mileage rate
| Use | Jan 1 – Jun 30, 2026 | Jul 1 – Dec 31, 2026 | 2025 |
|---|---|---|---|
| Business | 72.5¢ per mile | 76¢ per mile | 70¢ |
| Medical, and moving for active-duty military | 20.5¢ | 23.5¢ | 21¢ |
| Charitable service | 14¢ | 14¢ | 14¢ |
Standard rate vs actual expense method
| Standard mileage rate | Actual expense method | |
|---|---|---|
| How it works | Business miles × IRS rate | Business-use % × actual car costs |
| Costs covered | Gas, maintenance, insurance, depreciation, all in one rate | Gas, oil, repairs, tires, insurance, registration, lease or depreciation |
| Receipts needed | Mileage log only (plus parking and tolls) | Every car-related receipt, plus mileage log |
| Best for | Most drivers, fuel-efficient cars | Expensive cars, high running costs, low total miles |
| Rules | Must choose it in the first year the car is used for business; for a leased car, use it for the whole lease | Switching to the standard rate later may not be allowed |
The standard rate can’t be used if you operate five or more vehicles at the same time, such as a fleet. See IRS Topic 510 for the full rules.
What a mileage log must show
The IRS expects a record made at or near the time of each trip. A compliant log includes:
- Date of each business trip
- Starting point and destination
- Business purpose (for example “Site visit, Patel kitchen remodel”)
- Business miles for the trip (or odometer start and end)
- Total miles driven in the year, business and personal
| Date | From → To | Purpose | Miles |
|---|---|---|---|
| Sep 3 | Office → Riverside Clinic | Quarterly equipment check | 18.4 |
| Sep 3 | Riverside Clinic → Office | Return | 18.4 |
| Sep 5 | Office → Bank → Supplier | Deposit, pick up materials | 22.1 |
| Total business miles × 76¢ | 58.9 mi = $44.76 | ||
A log rebuilt from memory at year end is the first thing an auditor questions. Record trips the same day, even if it’s just a quick note on your phone.
The commuting rule
Driving between your home and your regular place of work is commuting, and commuting is personal, no matter how far it is or whether you take calls on the way. These trips do count as business miles:
- From your regular workplace to a client, job site or supplier, and back
- From home to a temporary work location, such as a one-off client site
- Between two work locations during the day
- From a home office that is your principal place of business to other work locations
Reimbursement vs tax deduction
Employees who are reimbursed under an accountable plan at or below the IRS rate pay no tax on it. If the employer pays more than the IRS rate, the excess is taxable wages. If the employer doesn’t reimburse, most employees can’t deduct the miles on their federal return under current law.
Self-employed people deduct business miles on Schedule C, line 9, using either method. Parking fees and tolls for business trips are deductible on top of the standard rate.
Common mileage log mistakes
- Rebuilding the log at year end from memory or a map. Auditors look for records made at the time.
- Round numbers like “50 miles” for every trip, which look estimated.
- No business purpose, just a destination.
- Including the commute as business miles.
- Forgetting total annual miles, which you need to show the business-use percentage.
Mileage and car receipts in your tax report
Log business trips in Manage Receipt and keep parking, toll and fuel receipts in the same place. The AI tax report brings mileage and vehicle costs together, so you can see which method gives the bigger deduction and hand your accountant a log that holds up.
Explore AI Tax ReportsFrequently asked questions
Is mileage reimbursement taxable?
Not if your employer reimburses you at or below the IRS standard mileage rate under an accountable plan and you provide a mileage log. Any amount paid above the IRS rate, or a flat car allowance with no log, is treated as taxable wages.
Can I deduct my commute?
No. Driving between your home and your regular workplace is commuting, which the IRS treats as a personal expense. Trips from your workplace to clients or job sites, between work locations, or from home to a temporary work location count as business miles.
Do I need gas receipts if I use the standard rate?
No. The standard mileage rate already includes fuel, maintenance, insurance and depreciation, so you don’t need gas receipts. You do need a mileage log showing dates, destinations, purpose and miles. Keep receipts for business parking and tolls, which you claim separately.
What is the IRS mileage rate for 2026?
For business driving, it’s 72.5 cents per mile from January 1 to June 30, 2026, and 76 cents from July 1 to December 31, after a rare mid-year increase. Medical and military moving miles rose from 20.5 to 23.5 cents. The charitable rate stays at 14 cents.