Most business owners knew the 2026 IRS standard mileage rate started the year at 72.5 cents per mile. Fewer know it didn’t stay there. In July, citing a 38 percent increase in the national average price of gasoline between January and mid-July, the IRS issued a rare mid-year adjustment and raised the business mileage rate to 76 cents per mile, effective July 1. That rate applies to every business mile driven for the remainder of the year.
The last time the IRS made a mid-year adjustment was 2022, also in response to fuel prices. When it happens, the administrative consequence is specific: 2026 becomes a split-rate year, and a mileage log that captures miles without dates cannot tell you which rate applies to which trip. If you’ve been tracking mileage casually with plans to sort it out at tax time, that approach just got more complicated.
The good news is that the higher rate makes the second half of the year more valuable for anyone who drives for business purposes. Every mile logged from July forward is worth three and a half cents more than it was in June. That adds up, and it’s worth capturing accurately.
What a split-rate year means for your records
For the 2026 tax year, business miles driven between January 1 and June 30 are deductible at 72.5 cents per mile. Business miles driven between July 1 and December 31 are deductible at 76 cents per mile. When you file, your total mileage deduction will be calculated by applying each rate to the miles driven in its respective period.
A mileage log that shows 8,000 business miles with no dates attached doesn’t support that calculation. Your tax preparer has no way to know how many of those miles occurred in which half of the year. A log that captures the date of each trip alongside the distance, the starting point, the destination, and the business purpose gives your preparer exactly what they need and protects your deduction if the IRS ever asks for documentation.
This is not a complicated record to keep. It is a consistent one. An app, a shared spreadsheet, or a dedicated notebook maintained as trips happen all satisfy the IRS requirement. What creates problems is attempting to reconstruct months of driving from memory in the spring.
What actually qualifies as a business mile
The IRS definition of a deductible business mile is more specific than most people assume, and understanding it helps you avoid both undercounting and overcounting your deduction.
Travel between your home and a regular, fixed place of business is commuting. Commuting miles are personal, not business, regardless of what happens once you arrive. The deductible miles begin when you leave one business location and drive to another: from your office to a client, from a client to a vendor, from your regular workplace to the bank or the post office on a business errand.
For business owners who work primarily from home, this distinction works in their favor. If your home is your principal place of business, trips from home to client sites, suppliers, or other business locations generally qualify as deductible miles. Home-based business owners frequently undercount this deduction by applying commuting logic to trips that are actually business travel under IRS guidelines.
The same standard applies regardless of whether you’re logging at 72.5 or 76 cents per mile. What counts as a business mile doesn’t change with the rate. What changes is how much that mile is worth once you’ve documented it.
Why the second half of the year matters more
August through December is often the busiest driving stretch of the year for small business owners. Client meetings before Q3 closes, vendor relationships to solidify before the year ends, supply runs, events, and the accumulated travel of a full fall season all concentrate in the back half. At 76 cents per mile, that activity has real deduction value.
Five thousand business miles in the second half of the year translates to $3,800 in deductible expenses. Ten thousand miles translates to $7,600. Neither figure is available to a business owner whose mileage log doesn’t exist or whose records won’t support the calculation. The deduction doesn’t disappear because you drove the miles. It disappears because you can’t prove you did.
August is also the right moment to address any gaps in the first half of the year. If your January through June mileage is incomplete, now is the time to reconstruct what you can while it is still reasonably recent, document your best-supported estimate, and establish a system that makes the rest of the year cleaner.
TEVA keeps your records ready for every rate change
At TEVA Bookkeeping Solutions, staying current on IRS changes that affect how your records should be kept is part of what we do. If your mileage tracking or broader bookkeeping needs attention before year-end, we can help.