Mileage deductions are one of the easiest ways for business owners to lower their tax bill, yet many overlook them or use the wrong method. With the IRS announcing new mileage rates for 2026, now’s a great time to review how you track business mileage and avoid missed savings.
Even small rate increases can make a big difference, especially for service businesses that log thousands of miles each year. The good news? You don’t need to be a tax expert to make the most of this deduction. You just need to know the rules and plan ahead.
What Is the IRS Mileage Rate?
Each year, the IRS sets a “standard mileage rate.” This is the per-mile amount that business owners can deduct for using a personal vehicle for work-related travel.
The rate is meant to cover the cost of:
- Fuel
- Oil changes and maintenance
- Insurance
- Registration
- Depreciation (wear and tear)
Instead of keeping track of every auto expense, you can simply track the number of business miles and multiply it by the IRS rate.
2026 Mileage Rate (and What’s New)
For 2026, the IRS has increased the standard mileage rate to 72.5 cents per mile. This new rate applies to all business miles driven starting January 1, 2026.
Even though this is only a small bump from last year, it can add up fast. Here’s a quick look at the numbers:
|
Business Miles Driven
|
Deduction at 72.5¢/mile
|
|
1,000 miles
|
$725
|
|
5,000 miles
|
$3,625
|
|
10,000 miles
|
$7,250
|
|
20,000 miles
|
$14,500
|
If you drive often for client visits, job sites, deliveries, or estimates, this deduction can make a big difference when it’s time to file your income taxes.
Who Should Pay Attention?
The mileage deduction is especially valuable for:
- Contractors and tradespeople
- Mobile service businesses (e.g., cleaning, pest control, repair)
- Sales teams and account managers
- Any business where employees use personal vehicles for work
Keep in mind: commuting from home to your office does not count. Only travel between work locations or to client sites qualifies for this deduction.
How to Get Ready for the Changes
Getting ahead of the mileage rate change is easier than you think.
Here’s what to do now:
- Review your current method. Are you using standard mileage or actual expenses? Does that still make sense?
- Use a mileage tracking app. Automate tracking so you aren’t scrambling in December.
- Update your reimbursement policy. If you reimburse employees, make sure you use the correct rate and keep clean records.
- Log miles throughout the year. Tracking mileage isn’t something you can fix later. You either have it or you don’t.
Need Help Getting It Right?
TMA Accounting supports business owners who want to take the guesswork out of deductions and recordkeeping. We can help you:
- Set up better systems and processes
- Decide which mileage method makes sense
- Avoid common pitfalls that lead to lost deductions
Let’s make 2026 the year you stop leaving money on the road. Reach out to us today and get the support you need to stay confident, compliant, and ready for whatever’s next.
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