The Internal Revenue Service (IRS) has released the 2026 optional standard mileage rates. Use them to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Effective Jan. 1, the rates are:
- 72.5 cents per mile driven for business use (up 2.5 cents from the 2025 rate).
- 20.5 cents per mile driven for medical or moving purposes for certain members of the Armed Forces and Intelligence community (a half-cent down from the 2025 rate).
- 14 cents per mile driven in service of charitable organizations (it takes an act of Congress to change this rate).
Note: The rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.
Limitations Created Under Tax Cuts and Jobs Act of 2017 Made Permanent Under One Big Beautiful Bill Act (OBBBA)
Under the Tax Cuts and Jobs Act of 2017 and now under OBBBA, taxpayers cannot:
- claim a miscellaneous itemized deduction for unreimbursed employee travel expenses and,
- cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. See Moving Expenses for Members of the Armed Forces for more details
Taxpayers can calculate the actual costs of using their vehicle rather than using the standard mileage rates. Taxpayers can usually only use the standard mileage rate in the first year a car is available for business use.
In later years, taxpayers can choose either the standard mileage rate or actual expenses.
Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals). This applies if the standard mileage rate is chosen.
What Does the Business Mileage Rate Increase Mean for Churches?
Increased amounts of reimbursement represent increased budget expenses, and that means adjusting budgets in ways that affect other ministry spending.
RELATED: Key Federal Tax Law Changes Churches and Clergy Need To Know for 2025–2026
Conversely, eliminating or reducing reimbursements shifts the burden to pastors and employees using personal vehicles for church-related business.
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