IRS raises business mileage deduction rate amid fuel price surge

July 17, 2026 - 02:47

The Internal Revenue Service has increased the standard business mileage deduction rate to 76 cents per mile, responding directly to the sharp rise in gasoline prices triggered by the ongoing conflict in Iran and its impact on global oil supplies. The new rate, which took effect immediately, represents a significant jump from the previous 70 cents per mile set earlier this year.

The adjustment comes as drivers across the country face record-high fuel costs, with the average price for a gallon of regular gasoline climbing past $5 in many regions. The Iran war has disrupted crude oil shipments through the Strait of Hormuz, a critical chokepoint for global energy trade, sending prices at the pump soaring. For businesses that rely heavily on vehicle travel, such as delivery services, sales fleets, and construction crews, the higher deduction offers some relief against mounting operational expenses.

Taxpayers who use their personal vehicles for work-related purposes can claim the new rate for miles driven during the current tax year. The IRS also updated the rates for medical and moving purposes, setting them at 24 cents per mile, and for charitable services at 14 cents per mile, though the latter remains fixed by law. Tax experts advise keeping detailed mileage logs to substantiate claims, as the agency may scrutinize deductions more closely amid the volatile fuel market. The change underscores how geopolitical instability can directly affect household and business budgets.