The 76-Cent Mileage Rate & Other 2026 Deductions: What to Track Now for a Bigger Refund

For business owners and high-mileage professionals, small tracking mistakes can become expensive tax mistakes. A missed business trip, incomplete receipt, or poorly documented equipment purchase may reduce the deductions you can confidently claim.

The 2026 rules also require extra attention because the business mileage rate changed during the year:

• 72.5 cents per business mile for miles driven from January 1 through June 30, 2026

• 76 cents per business mile for miles driven from July 1 through December 31, 2026

That is not a blended annual rate. You must separate your mileage by date.

At SJ Accounting Services, we help business owners turn daily financial records into useful tax-planning information. Here are the key deductions to track now, along with practical steps for keeping your records audit-ready.

Important: A deduction reduces taxable income; it does not produce a dollar-for-dollar refund. Your actual tax savings depend on your entity structure, tax bracket, state, income, and other factors.

1. Separate your 2026 business mileage into two periods

The IRS increased the business standard mileage rate for the second half of 2026. According to the IRS standard mileage rate guidance, use:

Mileage period	Business mileage rate
January 1–June 30, 2026	72.5 cents per mile
July 1–December 31, 2026	76 cents per mile

For example, assume you drove:

• 8,000 business miles from January through June

• 10,000 business miles from July through December

Your standard mileage calculation would be:

• 8,000 × $0.725 = $5,800

• 10,000 × $0.76 = $7,600

• Total 2026 mileage amount = $13,400

Do not simply multiply your total miles by 76 cents. The rate is based on when the miles were driven.

What counts as a business mile?

Depending on your facts, qualifying business travel may include driving to:

• Client meetings and job sites

• Vendor or supplier appointments

• Temporary work locations

• Business conferences and professional events

• Banks, courthouses, or government offices for business purposes

• Multiple business locations during the workday

Regular commuting from your home to your primary workplace is generally personal travel, not deductible business mileage. If your home office qualifies as your principal place of business, however, trips from that office to other business locations may receive different treatment.

2. Keep a mileage log that can support the deduction

A mileage deduction is only as strong as the records behind it. A bank statement showing fuel purchases does not prove how many business miles you drove, and a calendar appointment alone may not establish the full business purpose.

For each trip, record:

• Date of travel

• Starting point and destination

• Business purpose

• Business miles driven

• Odometer readings, when practical

• Client, project, or matter associated with the trip

• Whether the trip was reimbursed by your company

A mileage app can help, but technology is not a substitute for review. We recommend reconciling your mileage records monthly with your calendar, customer appointments, project schedules, and bookkeeping system.

If your company reimburses employees or owners for mileage, document the reimbursement policy and maintain records under an accountable plan where appropriate. Your business should also avoid double-counting: mileage reimbursements and a personal deduction for the same miles generally cannot both be claimed.

3. Compare standard mileage with actual vehicle expenses

The standard mileage method is convenient, but it is not always the best option. Depending on the vehicle and business-use percentage, the actual expense method may produce a better result.

Actual vehicle expenses may include:

• Fuel and charging costs

• Repairs and maintenance

• Insurance

• Registration fees

• Lease payments

• Depreciation

• Interest, where applicable

• Tires and other operating expenses

The actual expense method requires detailed records and a calculation of the vehicle’s business-use percentage. If you use the vehicle for both personal and business purposes, only the qualifying business portion is generally considered.

This is a planning decision, not merely a bookkeeping preference. Before purchasing a vehicle or selecting a method, discuss the expected business use, financing, depreciation strategy, and long-term ownership plans with your tax adviser.

4. Track equipment purchases for 100% bonus depreciation

For qualifying property acquired after January 19, 2025, current rules generally restore 100% bonus depreciation. This may allow a business to deduct the full cost of eligible property in the year it is placed in service, subject to the applicable requirements.

Potentially qualifying property can include certain:

• Machinery and equipment

• Computers and technology

• Furniture

• Vehicles

• Qualified improvements

• New and used tangible business property

The key phrase is placed in service. Signing a purchase order or making a deposit may not be enough. The property generally must be ready and available for its intended business use.

Maintain a fixed-asset file containing:

• Purchase agreement or invoice

• Date acquired

• Date placed in service

• Financing documents

• Description and business purpose

• Serial number or asset identification

• Business-use percentage

• Details of any trade-in or disposition

Bonus depreciation can create significant tax savings, but accelerating a deduction is not always automatically the right choice. A business expecting unusually low income, planning an ownership change, or anticipating future tax-rate changes may benefit from a different depreciation approach.

The IRS guidance on the additional first-year depreciation deduction provides additional technical detail.

5. Review the 2026 Section 179 limit before year-end

For tax years beginning in 2026, the maximum Section 179 deduction is $2.56 million. The deduction begins to phase out when total qualifying Section 179 property placed in service exceeds $4.09 million. The 2026 Section 179 limit for qualifying sport utility vehicles is generally $32,000.

Section 179 may be attractive because it can allow a business to expense qualifying property immediately rather than depreciating it over several years. However, it is subject to business-income limitations and other rules.

Track the following throughout the year:

• Total equipment placed in service

• Whether each asset is new or used

• Business-use percentage

• Total Section 179 property acquired by your business

• Vehicle weight and classification

• Financing and delivery dates

• Whether the asset is used primarily for business

The IRS Publication 946 includes depreciation and Section 179 rules. We also recommend reviewing large purchases with our team before the transaction is finalized, not after year-end when planning options may be limited.

6. Monitor business interest expense under the EBITDA-based limit

Businesses with significant debt should monitor the Section 163(j) business-interest limitation. For 2026, the general limitation is based on:

• Business interest income

• Plus 30% of adjusted taxable income

• Plus floor-plan financing interest, where applicable

Current rules use an EBITDA-based adjusted taxable income calculation, which generally adds back depreciation, amortization, and depletion. Any excess business interest may be carried forward rather than deducted immediately.

This matters to companies with:

• Acquisition debt

• Equipment financing

• Real estate or construction loans

• Private equity or shareholder debt

• Multi-entity structures

• Large revolving credit facilities

Your bookkeeping system should distinguish interest expense from principal payments, capitalized interest, loan fees, and other financing costs. Review IRS questions and answers about the business-interest limitation and speak with your adviser before assuming all interest paid is currently deductible.

7. Do not overlook Schedule 1-A deductions

Schedule 1-A is generally relevant to individual taxpayers rather than business entities, but it may matter to business owners, employees, and high-mileage professionals personally.

For 2026, taxpayers may need to track information relating to:

• Qualified tips

• Qualified overtime compensation

• Interest on qualifying passenger vehicle loans

• The additional deduction for taxpayers age 65 and older

The rules include limits, eligibility requirements, and income phaseouts. For example, qualified tips and overtime require specific documentation, while vehicle-loan interest depends on the type of vehicle, loan, purchase date, and personal-use requirements.

The IRS explains these changes through its guidance on Schedule 1-A additional deductions. Keep wage statements, employer reports, loan-interest statements, and age-related information organized rather than waiting until tax season.

A clean-records checklist for the rest of 2026

Before the year ends, ask your accounting team to verify:

• Mileage is separated between the two 2026 rates

• Business and personal driving are clearly distinguished

• Vehicle reimbursements are properly recorded

• Equipment purchases include placed-in-service dates

• Fixed-asset records agree with the general ledger

• Section 179 and bonus depreciation options have been modeled

• Interest expense is classified correctly

• Schedule 1-A information is being gathered for individual returns

• Receipts and supporting documents are stored in a centralized system

• Monthly reconciliations are complete

Make your records work harder for you

The best tax deduction is not simply the largest deduction. It is a deduction that is properly calculated, supported by reliable records, and incorporated into a broader tax and cash-flow strategy.

At SJ Accounting Services, our team can help you organize mileage records, maintain clean books, review equipment purchases, monitor interest limitations, and identify planning opportunities before deadlines arrive. Our bookkeeping services, tax planning resources, and Virtual CFO services are designed to give growing businesses better visibility and confidence.

If your mileage logs, equipment purchases, or financial records need attention, please contact us before year-end. We will be glad to help you turn complicated tax rules into a practical, well-documented plan. Thank you for trusting SJ Accounting Services, and we wish you continued success in 2026.