The IRS Raised the Mileage Rate Midyear for the First Time Since 2022, and Most Clients Have No Idea

Effective 1 July 2026, the optional standard mileage rate for business use rose to 76 cents per mile, up from 72.5 cents. The rate for medical and moving purposes rose to 23.5 cents, up from 20.5 cents. The charitable rate is fixed by statute and stays at 14 cents. The change came through Announcement 2026-11, which modified Notice 2026-10.

The reason given was fuel. When the original 2026 rates were set in late December, the American Automobile Association put the national average at $2.819 a gallon. By 15 July it was $3.890, a rise of about 38% in a little over six months.

Here is the part that matters commercially. The last time the IRS adjusted the standard mileage rate midyear was 2022. Four years is long enough that a large share of business owners, bookkeepers and in-house finance staff have never handled a split-rate year. They will file as though one rate applied to the whole of 2026, and a meaningful number of them will get it wrong.

What exactly changed on 1 July 2026?

Business mileage moved from 72.5 cents to 76 cents per mile. Medical and moving mileage moved from 20.5 cents to 23.5 cents. Charitable mileage remains 14 cents, set in statute rather than by the IRS. All three apply to miles driven on or after 1 July 2026, with the earlier rates applying to the first half of the year.

Why does a midyear change create work most firms are not billing for?

Because it turns one number into two, across every client who claims vehicle expense. Mileage logs now need a clean break at 30 June. Reimbursement policies written around 72.5 cents are now under-reimbursing employees. Accountable plans, expense software defaults and payroll settings all carry the old figure until somebody changes them.

None of that is complicated work. All of it is work that goes undone if nobody raises it, and each undone item becomes a correction later. The firms that get in front of it convert a two-line IRS announcement into a genuine client conversation, which is a far better use of it than a footnote in a January engagement letter.

Does the standard mileage rate still make sense for every client?

Not automatically, and the change is a reasonable prompt to check. The standard rate is one of two methods, the alternative being actual expenses, and the better answer depends on the vehicle, the mileage and how much of the running cost is fuel rather than depreciation and insurance.

A rise driven specifically by fuel prices shifts that calculation for some clients and not others. High-mileage drivers in fuel-hungry vehicles tend to benefit from the standard rate rising. Clients with expensive vehicles covering modest business mileage often did better on actual expenses already, and nothing about this announcement changes that.

The wider point is that the rate change gives a firm a legitimate reason to reopen a decision most clients made once and never revisited. That is a considerably better conversation than an annual reminder to send in receipts.

Who is most exposed to getting this wrong?

Three groups, in roughly this order.

Businesses with employee reimbursement programs are first. If your reimbursement rate is still set at 72.5 cents, employees driving after 1 July are being reimbursed below the federal standard. That is not illegal, but it is a morale problem and a retention problem, and it is the kind of thing an employee discovers at the worst moment.

Self-employed clients and single-member entities are second. They are the most likely to keep informal mileage records and the least likely to have anybody checking IRS announcements on their behalf. A client who logs 18,000 business miles across the year and applies one rate to all of them will misstate the deduction by hundreds of dollars.

Companies running expense software with a hardcoded rate are third, and they are the quietest failure. The software keeps producing confident-looking reports at the wrong number until someone opens the settings.

How much money is actually at stake for a client?

Enough to be worth a conversation, not enough to frighten anyone. A client driving 20,000 business miles a year, split evenly across the two halves, gains about $350 from the rate change compared with applying the old rate throughout. A sales-heavy business with several drivers covering 60,000 miles between them in the second half is looking at roughly $2,100 in additional deduction.

Those are not transformative sums, and that is precisely why they get missed. The amounts are too small to trigger anyone's alarm and large enough to matter when they compound across a client base. Multiply a few hundred dollars by every driving client a firm serves and it becomes the most concrete demonstration of value a firm can offer in August, which is otherwise a quiet month for client contact.

There is a reverse case worth flagging too. Businesses reimbursing employees at the old rate are now paying less than the federal standard, which means employees are absorbing a real cost increase without anybody deciding that they should. Firms that raise this before an employee does are handing their client a problem already solved.

Why is this a marketing opportunity and not just a compliance note?

Because it is a search event with a short half-life and low competition. When the IRS changes something midyear, people go looking for the answer immediately, and they type plain questions: what is the new mileage rate, when does 76 cents start, do I use two rates for 2026. Those questions get asked by business owners who do not currently have a CPA firm they trust.

We have watched this pattern work. A post published quickly against a specific, well-defined regulatory change reaches page one far faster than a general page about accounting services ever will, because it is competing against a much smaller field. Our earlier coverage of the BOI reporting repeal for US firms is the clearest example of that in our own results.

The broader mechanics of that approach are set out in our guide to digital marketing for accounting firms.

What should a CPA firm publish about this, and when?

Something short, specific and dated, and this week rather than next month. A page that states both rates, the effective date, and what a client should do about mileage logs and reimbursement policies will answer the actual question people are searching for. It does not need to be long. It needs to be findable and correct.

Then send it. The same content works as a client email, a LinkedIn post and a one-paragraph note to every business client with a vehicle policy. The firms that treat each regulatory change as one piece of writing used four ways get considerably more from the same hour than firms that write four separate things.

Does publishing this kind of thing actually bring in clients?

It brings in the early part of the relationship, which is the part most firms are missing. Somebody searching for the new mileage rate is not looking for a CPA. They are looking for a number. But they arrive on your page, they get a correct answer, and your firm becomes the one that helped when nobody else did.

A share of those readers turn out to be business owners in your state who are quietly unhappy with their current firm. They were never going to respond to an advert. They responded to being useful. That is the whole mechanism, and it is why specific, fast, accurate writing outperforms general marketing copy for professional services almost every time.

The firms that struggle with this usually struggle for one of two reasons. Either publishing requires a developer, so a two-hour job becomes a two-week job and the moment passes, or nobody owns the task, so it happens when someone is between deadlines. Both are fixable, and both are worth fixing before the next change lands.

What does a firm do with this after the news cycle passes?

Fold it into the year-end conversation. A split-rate year is a natural reason to review accountable plans, reimbursement policy and expense software configuration with clients who have never had that review. Those conversations tend to surface work well beyond mileage.

It is also worth keeping the page. Midyear changes are rare, so a well-written page about the 2026 split rate will keep collecting search traffic through the whole filing season, long after the announcement itself has stopped being news. Our note on IRS penalty increases and the advisory window they created has behaved the same way.

If you want that engine running consistently rather than whenever somebody in the firm finds a spare afternoon, our USA digital marketing services for CPA firms and our search engine optimisation work are built around exactly this rhythm.

Triomatic Marketing is an AI-powered, founder-led agency working with accounting firms across the USA and UK, and we keep 82% of our clients by making independent firms visible on the questions their clients are already asking.

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