The Mileage Rate Changed in July. Your Log Needs Splitting.

Most years the IRS sets one business mileage rate in December and it holds for twelve months. 2026 did not work that way.

The rate opened the year at 72.5 cents per mile. On July 1 the IRS raised it to 76 cents, citing fuel costs. Both rates apply to 2026 — just to different halves of it.

If you do what almost everyone does at tax time — take your total business miles for the year and multiply by one number — you will get the wrong answer. Not a rounding error, either.

What it costs to get this wrong

Take a contractor who drove 18,000 business miles in 2026, split evenly across the year.

Done correctly: 9,000 miles at 72.5¢ is $6,525. Another 9,000 at 76¢ is $6,840. Total $13,365.

Multiplying everything by 72.5¢: $13,050. You just under-claimed $315 of deduction, which at a combined self-employment and income tax rate north of 30% is roughly $100 you handed over for no reason.

Multiplying everything by 76¢: $13,680. You over-claimed by $315. Smaller problem in dollars, larger problem in kind — it is an overstated deduction, and if the rest of the return gets examined it is the sort of thing that invites more attention.

The error scales with your mileage. A route driver at 40,000 miles is looking at a $700 swing.

The part that catches people out

The split is by when you drove, not when you were paid, not when you logged it, and not when the work was invoiced. A trip on June 28th is a 72.5¢ trip even if the customer paid you in August.

This is why the log matters more than usual this year. A mileage record that reads “about 18,000 miles, mostly local jobs” cannot be split. One with dates can.

How to fix a messy log before December

You still have time, and reconstruction is easier than it sounds if you work from records you already have.

1. Pull anything with a date and a place on it. Job invoices, work orders, calendar entries, fuel receipts, supplier receipts. Each one is evidence you were somewhere on a specific day.
2. Rebuild routes, not trips. If you ran five stops on a Tuesday, one entry reading “Tuesday route, five stops, 87 miles” is both easier to write and perfectly acceptable.
3. Split the file at June 30. Two totals, not one. Label them clearly so whoever prepares your return does not have to guess.
4. Start logging properly for the rest of the year. The last quarter is the easiest to get right because it has not happened yet.

If you use actual expenses instead

The rate change does not affect you. Actual-expense filers deduct a business-use percentage of real costs — fuel, insurance, repairs, depreciation — so there is no cents-per-mile figure in the calculation at all.

You still need the mileage log, though. The business-use percentage is miles driven for business over total miles driven, so the odometer work does not go away. It just feeds a different formula.

What to do this week

Open your mileage log. If you cannot answer “how many business miles did I drive between January and June,” that is the gap, and it is far cheaper to close in September than in April.

If you track mileage with us, the split is already there — every trip is stored with its date, so the two halves separate cleanly at export. If you track it on paper, take an hour this week and rebuild what you can while the year is still fresh enough to reconstruct.