At the end of last year, the IRS announced its annualinflation adjustments to the optional standard mileage rates used to calculatethe deductible vehicle operating costs for business, charitable, medical ormoving purposes. And there's good news for those who drive for work: Thecents-per-mile deduction increased for this year—even though the average priceof gas around the country has decreased since last year at this time. On thedownside, the deduction for other purposes has either declined slightly orremained unchanged from 2025. Let's cruise into the specifics.
Deduction Amounts
Beginning on January 1, 2026, the standard mileage rates fora car, van, pickup or panel truck are:
Important: Active-duty members of the ArmedForces and certain members of the intelligence community can deduct movingexpenses when they must move under orders for a change of station. In thesecases, eligible taxpayers can deduct 20.5 cents per mile in 2026 (down from 21cents). Other taxpayers can't claim a deduction for moving expenses.
Gas Prices
The standard mileage rate for business use is calculatedusing an annual study of the fixed and variable costs of operating anautomobile
As mentioned, the national average price ofgas has gone down from a year ago. On January 30, 2026, the national averageprice of a gallon of regular unleaded gas was $2.87, according to AAA FuelPrices, compared with $3.12 per gallon a year earlier.
Of course, depending on where you live or work, gas pricesmay be much higher or lower than the national average. For example, on January30, 2026, the average price of a gallon of regular unleaded gas was $4.30 inCalifornia and $2.59 in South Carolina. In some cases, when gas prices arefalling or rising significantly, the IRS has even made midyear changes to thestandard mileage rate.
Note: Although fully electric and hybridvehicles use no gas or less gas, the standard mileage rates also apply to them.
Rules for Business Deductions
If you use a vehicle for work, you can generally deduct theportion of eligible vehicle expenses attributable to business use. Theseinclude gas, oil, tires, insurance, repairs, licenses and vehicle registrationfees—provided the expenses are properly documented and supported by recordsshowing the percentage of business use. This is commonly referred to as theactual expense method.
In addition, you may claim a depreciation allowance for thevehicle based on the percentage of business use. However, annual write-offs aresubject to so-called "luxury car" limits, which are indexed annuallyfor inflation.
If you don't want to use the actual expense method, there'san easier option. You may be able to simply apply the standard cents-per-milerate noted above. Doing so means you don't have to account for all youreligible expenses, though you must still record the following for each businesstrip:
Again, use of the standard mileage rate is optional. Sometaxpayers choose the more arduous actual expense method. Why? One reason isthat you generally can't use the standard mileage rate for a vehicle afterclaiming accelerated depreciation (including the Modified Accelerated CostRecovery System) or a Section 179 deduction for the vehicle in question. Inaddition, you can't use the standard mileage rate for more than four vehiclesused simultaneously.
Note: For a leased vehicle, taxpayers using thestandard mileage rate must employ that method for the entire lease period,including renewals.
Turn Business Miles into Savings
Whether you use the actual expense method or apply thestandard mileage rate, deducting business driving costs is relatively simpleand potentially valuable in terms of tax savings. However, the IRS requiresdocumentation in either case.
Taking the time to track your mileage and other key datapoints consistently throughout the year can help you maximize deductions andavoid IRS challenges to your tax return. If you're unsure which method is bestfor your situation, or you'd like some help with the calculations, contact yourSSB tax advisor for guidance.
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