For a rideshare driver who owns a car, the 2026 standard mileage rate is 72.5 cents for each business mile driven January 1 through June 30 and 76 cents for each business mile driven July 1 through December 31. Actual expenses beat that blended rate only when running costs plus depreciation per business mile are higher, and on a car you own the first-year choice decides which method the car can ever use.
Thirty-five of those cents are not an operating allowance. Notice 2026-10 treats 35 cents of every 2026 business mile as depreciation, and the July increase leaves that amount alone, so all of the extra 3.5 cents raises the operating part of the rate. The standard rate is therefore a running-cost allowance of 37.5 cents (41.0 cents from July 1) bundled with a fixed 35-cent depreciation allowance, and the comparison with actual expenses has to be made in those two pieces. Take your own fuel, wear and miles to the rideshare earnings calculator for take-home pay per hour. The sections below are the tax arithmetic behind the vehicle line.
What the 72.5-cent and 76-cent rates replace
A driver who uses the standard rate for a year deducts business miles times the rate and nothing for the car itself. Revenue Procedure 2019-46, section 4.02, lists what the rate stands in for: depreciation or lease payments, maintenance and repairs, tires, gasoline including all taxes on it, oil, insurance, and license and registration fees. Publication 463 (2025) states the consequence in one sentence: "If you use the standard mileage rate for a year, you can't deduct your actual car expenses for that year."
Some costs sit outside the rate. Publication 463 says "In addition to using the standard mileage rate, you can deduct any business-related parking fees and tolls," and the actual-expense list in the same chapter names tolls and parking too. It says "You may be able to take a deduction for interest paid on a car loan even if you use the standard mileage rate," and that a self-employed driver "can deduct that part of the interest expense that represents your business use of the car." It adds that a self-employed driver can deduct the business part of state and local personal property taxes on motor vehicles on Schedule C. The actual-expense section sends the reader back to those same interest rules. So tolls, parking, loan interest and property tax do not separate the two methods, and the break-even below compares only the car's operating cost and its depreciation (or lease payments). The car loan interest deduction guide covers the vehicle-loan interest deduction that the 2025 legislation added, which is a separate question from the business share of interest.
Publication 463 also answers the question rideshare drivers ask first: "You can elect to use the standard mileage rate if you used a car for hire (such as a taxi) unless the standard mileage rate is otherwise not allowed, as discussed above." The exclusions it refers to appear in the first-year section below.
The rate is two numbers in 2026, and one of them is fixed
The IRS standard mileage rates page (last reviewed July 28, 2026) lists 2026 in two rows. Miles from January 1 through June 30 are 72.5 cents, and miles from July 1 through December 31 are 76 cents. The second row rests on Announcement 2026-11, printed in Internal Revenue Bulletin 2026-29 of July 13, 2026. Its operative text reads: "The revised standard mileage rates set forth in this announcement apply to deductible transportation expenses paid or incurred for business, medical, or moving expense purposes on or after July 1, 2026, and to mileage allowances that are paid both (1) to an employee on or after July 1, 2026, and (2) for transportation expenses paid or incurred by the employee on or after July 1, 2026. The standard mileage rates set forth in Notice 2026-10 continue to apply to deductible transportation expenses paid or incurred for business, medical, or moving expense purposes before July 1, 2026, and to mileage allowances paid (1) to an employee before July 1, 2026, or (2) with respect to transportation expenses paid or incurred by the employee before July 1, 2026." The announcement gives its reason in one sentence: "This modification results from recent increases in the price of fuel."
The announcement changes only the cents-per-mile rates. It says "All other provisions of Notice 2026-10 remain in effect," and one of those provisions is section 4: "For automobiles a taxpayer uses for business purposes, the portion of the business standard mileage rate treated as depreciation is 26 cents per mile for 2022, 28 cents per mile for 2023, 30 cents per mile for 2024, 33 cents per mile for 2025, and 35 cents per mile for 2026." Announcement 2026-11 does not restate or alter that figure, so the 2026 depreciation component is 35 cents for miles in both halves of the year.
| Year | Business rate (cents per mile) | Portion treated as depreciation (cents per mile) | Left for fuel, tires, repairs, insurance and the rest |
|---|---|---|---|
| 2025 | 70 | 33 | 37 |
| 2026, miles before July 1 | 72.5 | 35 | 37.5 |
| 2026, miles from July 1 | 76 | 35 | 41 |
The table shows where the July increase went. In the second half of 2026 the depreciation share is 35 of 76 cents, or 46.1 percent, against 48.3 percent of the first half's 72.5 cents. A driver weighing actual expenses against the standard rate in the second half is weighing running costs against 41.0 cents a mile, up 3.5 cents from 37.5 cents in the first half.
Blending 72.5 and 76 from your own mileage log
Each mile earns the rate of the date it was driven, so the 2026 deduction is first-half miles times 72.5 cents plus second-half miles times 76 cents. The blended rate is that deduction divided by total miles. No single blended figure fits everyone, because it depends on how the log splits at July 1.
The table fixes 20,000 business miles for the year and moves the split.
| Miles Jan 1 to Jun 30 | Miles Jul 1 to Dec 31 | Deduction | Blended rate | Basis reduction (35 cents) | Operating part |
|---|---|---|---|---|---|
| 20,000 | 0 | $14,500 | 72.50 cents | $7,000 | $7,500 |
| 15,000 | 5,000 | $14,675 | 73.38 cents | $7,000 | $7,675 |
| 10,000 | 10,000 | $14,850 | 74.25 cents | $7,000 | $7,850 |
| 5,000 | 15,000 | $15,025 | 75.13 cents | $7,000 | $8,025 |
| 0 | 20,000 | $15,200 | 76.00 cents | $7,000 | $8,200 |
An even split gives 74.25 cents. A driver who logged 9,000 miles before July and 11,000 after gets $14,885 (9,000 times 72.5 cents is $6,525, 11,000 times 76 cents is $8,360), a blended 74.425 cents. The basis reduction is the same $7,000 in every row, because 20,000 miles times 35 cents does not depend on the date. Only the operating part moves, from $7,500 in the all-first-half row to $8,200 in the all-second-half row.
Weighting by calendar days (181 days before July 1, 184 after) gives 74.26 cents for a log that is even by the calendar, 0.014 cents above the even-miles figure. A driver who stops in June or starts in August sits at one end of the table. The tables from here on use 74.25 cents, the even-miles blend, and say so where they do. The IRS page lists no 2027 rate, so any multi-year figure holds 74.25 cents constant as an assumption and not as a forecast.
The break-even in one line
Take a car driven only for business. The standard method deducts the blended rate times business miles. The actual method deducts running costs plus depreciation. The two are equal when:
running cost per mile = blended rate minus (depreciation taken in the year divided by business miles)
If the real running cost per mile is above that figure, actual expenses give the larger deduction in that year. If it is below, the standard rate does.
Mixed use keeps the structure. Publication 463 has the driver figure the business share by "dividing the number of miles you drive your car for business purposes during the year by the total number of miles you drive the car during the year for any purpose," and that share applies to the car's expenses and to the depreciation limit. A car's running costs per mile of all driving, multiplied by business miles, give the business share of running costs. The depreciation limit and the depreciable basis both shrink by the business share, so first-year depreciation per business mile becomes the limit or the cost divided by total miles. The business-share table in the year-one section runs the calculation at 100, 80 and 60 percent.
What counts as running cost
Publication 463 lists the actual car expenses: depreciation, lease payments, registration fees, licenses, insurance, repairs, gas, garage rent, tires, oil, tolls and parking. Take out depreciation and lease payments, which the break-even handles separately, and tolls and parking, which are deductible either way, and what remains is the running cost the break-even refers to. For fuel, the cost per mile is the price per gallon divided by miles per gallon.
| Fuel price per gallon | 25 miles per gallon | 35 miles per gallon | 50 miles per gallon |
|---|---|---|---|
| $3.00 | 12.0 cents | 8.6 cents | 6.0 cents |
| $4.00 | 16.0 cents | 11.4 cents | 8.0 cents |
| $5.00 | 20.0 cents | 14.3 cents | 10.0 cents |
Fuel alone runs from 6.0 cents a mile (50 mpg at $3.00) to 20.0 cents (25 mpg at $5.00). The price rows are inputs and not a forecast. The fuel cost calculator and fuel economy calculator turn receipts and trip data into the cents-per-mile figure.
A complete running cost adds the other items. The next table builds an example for a driver covering 30,000 miles a year, using round example inputs and not market data.
| Cost item (example input) | Annual amount at 30,000 miles | Cents per mile |
|---|---|---|
| Fuel at $4.00 a gallon and 35 miles per gallon | $3,429 | 11.4 |
| Repairs, maintenance, tires and oil at 8.0 cents | $2,400 | 8.0 |
| Insurance at $2,400 a year | $2,400 | 8.0 |
| Registration and license fees at $200 a year | $200 | 0.7 |
| Running cost, all items | $8,429 | 28.1 |
On those inputs the running cost is 28.1 cents per mile. The break-even tables below are read against that number, and a reader's own receipts replace every row of it.
Year one with bonus depreciation
A car bought and first used in business in 2026 can be written off in the first year under the additional first-year (bonus) depreciation rules or a section 179 deduction, up to the annual limit for passenger cars. Revenue Procedure 2026-15 states that the amended section 168(k) allows a deduction of 100 percent of adjusted basis for qualified property acquired and placed in service after January 19, 2025. It also lists who cannot take it for a 2026 car: a taxpayer who did not use the automobile during 2026 more than 50 percent for business, who elected out for the class of property that includes passenger automobiles, who acquired a used automobile that did not meet the acquisition requirements, or who acquired the automobile before September 28, 2017.
The same revenue procedure sets the limits for passenger automobiles, which it defines to include trucks and vans, placed in service in 2026: $20,300 in the first tax year when the bonus applies (Table 1) and $12,300 when it does not (Table 2). The second-year, third-year and later-year limits are $19,800, $11,900 and $7,160 in both tables, and they continue to apply for each taxable year the car stays in service. The limits cover vehicles of 6,000 pounds or less; Publication 463 defines a car for depreciation purposes as a four-wheeled vehicle made primarily for public roads with an unloaded gross vehicle weight (gross vehicle weight for trucks and vans) of not more than 6,000 pounds, and heavier vehicles follow other rules this guide does not work.
The cap is why vehicle cost stops mattering above a point. A $20,300 car and a $50,000 car both produce $20,300 of first-year depreciation at full business use, so three rows cover every price. For a car costing less than the cap, bonus depreciation writes off the whole price in year one. Each cell is the running cost per mile above which year-one actual expenses beat the blended 74.25-cent rate.
| First-year depreciation | 15,000 miles | 25,000 miles | 35,000 miles | 45,000 miles |
|---|---|---|---|---|
| $10,000 | 7.6 | 34.3 | 45.7 | 52.0 |
| $15,000 | any cost | 14.3 | 31.4 | 40.9 |
| $20,300 (cap, any car costing that or more) | any cost | any cost | 16.3 | 29.1 |
A cell reading "any cost" is negative: first-year depreciation alone exceeds the standard-rate deduction, so actual expenses win year one even with no running cost. $20,300 of depreciation exceeds the standard-rate deduction of $18,563 at 25,000 miles, so every car costing $20,300 or more shows "any cost" in the 15,000-mile and 25,000-mile columns. The $15,000 car shows "any cost" at 15,000 miles and 14.3 cents at 25,000. At 45,000 miles a year the $20,300 write-off is 45.1 cents per mile and the break-even is 29.1 cents, 1.0 cent above the 28.1-cent example running cost.
Year one overstates what the actual method delivers over a car's life, because a dollar of depreciation taken now is not available later, while the standard rate's depreciation component keeps arriving every year. The lifetime view further down corrects for that. Year one matters first because of what the choice does to the options that follow.
Year one without bonus depreciation
A driver can elect out of bonus depreciation, and the car then falls to MACRS: for five-year property under the half-year convention the percentages are 20, 32, 19.2, 11.52, 11.52 and 5.76. First-year depreciation is the lesser of 20 percent of cost and the $12,300 Table 2 limit. (A car used 50 percent or less in business can take neither bonus nor MACRS; Publication 463 sends it to straight-line depreciation, which this guide does not work.)
| Vehicle cost | First-year depreciation | 15,000 miles | 25,000 miles | 35,000 miles | 45,000 miles |
|---|---|---|---|---|---|
| $15,000 | $3,000 | 54.3 | 62.3 | 65.7 | 67.6 |
| $25,000 | $5,000 | 40.9 | 54.3 | 60.0 | 63.1 |
| $35,000 | $7,000 | 27.6 | 46.3 | 54.3 | 58.7 |
| $50,000 | $10,000 | 7.6 | 34.3 | 45.7 | 52.0 |
Here vehicle cost matters. A $50,000 car at 15,000 miles breaks even at 7.6 cents because its $10,000 of first-year depreciation is large per mile, while a $15,000 car at the same mileage needs 54.3 cents. Against the 28.1-cent example running cost, 2 of the 16 cells in the table sit below it, which means actual expenses win year one in only those combinations on the no-bonus path.
Business share changes the cap and the basis together
A $25,000 car driven 20,000 business miles gives different year-one break-evens as the personal share grows, because the depreciable basis and the limit both scale with business use while the business miles stay at 20,000.
| Business share of all miles | Total miles driven | Year-one depreciation, bonus case | Break-even running cost, bonus case (cents) | Year-one depreciation, no-bonus case | Break-even running cost, no-bonus case (cents) |
|---|---|---|---|---|---|
| 100% | 20,000 | $20,300 | any cost | $5,000 | 49.3 |
| 80% | 25,000 | $16,240 | any cost | $4,000 | 54.3 |
| 60% | 33,333 | $12,180 | 13.4 | $3,000 | 59.3 |
At 60 percent business use the bonus-case break-even is 13.4 cents, below the 28.1-cent example running cost, so year-one actual expenses come out ahead on those inputs. The no-bonus break-even at that share is 59.3 cents. Below 50 percent business use the straight-line rules apply instead.
Over the car's life, the 35 cents acts as a depreciation allowance
Year-one tables favor the front-loaded method, so the lifetime question needs separate arithmetic. The standard rate reduces basis by 35 cents for each mile (33 cents for 2025 miles, 30 for 2024) but never below zero. Publication 463 states what happens when the basis runs out: "If your basis is reduced to zero (but not below zero) through the use of the standard mileage rate, and you continue to use your car for business, no adjustment (reduction) to the standard mileage rate is necessary." The full rate keeps paying after the basis is gone.
| Vehicle cost | Miles until the basis reaches zero at 35 cents | Miles at 33 cents (2025 rate) |
|---|---|---|
| $15,000 | 42,857 | 45,455 |
| $25,000 | 71,429 | 75,758 |
| $35,000 | 100,000 | 106,061 |
| $50,000 | 142,857 | 151,515 |
The table gives the mileage at which the standard rate has returned the whole purchase price as a depreciation component. Rideshare mileage gets there fast: 30,000 business miles a year reduce basis by $10,500 a year.
| Business miles in 2026 | Basis reduction at 35 cents | Same miles in 2025 at 33 cents |
|---|---|---|
| 10,000 | $3,500 | $3,300 |
| 20,000 | $7,000 | $6,600 |
| 30,000 | $10,500 | $9,900 |
| 40,000 | $14,000 | $13,200 |
A sale then settles the difference. A lower adjusted basis from standard-rate miles means a larger gain or a smaller loss at sale, and Publication 463 says "The portion of any gain that is due to depreciation (including any section 179 deduction, clean-fuel vehicle deduction (for vehicles placed in service before January 1, 2006), and special depreciation allowance) that you claimed on the car will be treated as ordinary income." To compare the methods end to end, count deductions net of the gain on sale. Let C be the purchase price, M lifetime business miles, S the sale price and R the running cost per mile. With actual expenses, whatever adjusted basis A the car ends with, depreciation taken is C minus A and the gain is S minus A, so deductions net of gain come to R times M plus C minus S. With the standard rate they come to the blended rate times M, minus the gain S minus B, where B is the adjusted basis left after the 35-cent reductions, the larger of zero and C minus 0.35 M. Setting the two equal gives:
break-even running cost per mile = blended rate minus (the smaller of C and 0.35 M) divided by M
The sale price S cancels. For a low-mileage car, 0.35 M is smaller than C and the break-even is the rate minus 35 cents, 39.3 cents at the even-miles blend. For a high-mileage car where 0.35 M exceeds the cost, the break-even is the rate minus the cost per lifetime mile.
| Vehicle cost | 60,000 lifetime miles | 100,000 lifetime miles | 150,000 lifetime miles | 200,000 lifetime miles |
|---|---|---|---|---|
| $15,000 | 49.3 | 59.3 | 64.3 | 66.8 |
| $25,000 | 39.3 | 49.3 | 57.6 | 61.8 |
| $35,000 | 39.3 | 39.3 | 50.9 | 56.8 |
| $50,000 | 39.3 | 39.3 | 40.9 | 49.3 |
The cells at 39.3 cents are the low-mileage case, where the standard rate's depreciation component is still running. Moving right along a row raises the break-even toward the full 74.25 cents, because a long-lived car spreads its cost over so many miles that the standard rate's 35 cents overpays the depreciation. Moving down a column lowers it, because a costlier car leaves more basis to recover. The smallest cell is 39.3 cents, and all 16 cells are above the 28.1-cent example running cost, which makes the standard rate the larger lifetime deduction on those inputs in every case shown.
A worked sale shows the formula in use. A $30,000 car is driven 120,000 business miles over four years at the 74.25-cent blend and sold for $6,000. The standard method deducts $89,100. Its basis reduction would be $42,000, more than the cost, so the adjusted basis is $0 and the whole $6,000 sale is gain, leaving $83,100 of deductions net of gain. The actual method nets R times 120,000 plus $30,000 minus $6,000, which ties with $83,100 at a running cost of 49.25 cents a mile, the rate minus $30,000 over 120,000 miles.
A second case has the other shape. A $25,000 car with 40,000 business miles has an adjusted basis of $11,000 after the standard method takes $14,000. It sells for $11,000, which is that adjusted basis, so there is no gain, and the break-even is 39.25 cents, the rate minus the depreciation component.
Three things sit outside this arithmetic, and each moves the answer. Money has a time value, so early deductions are worth more than the same dollars later. Deductions and gains are not necessarily taxed alike: a business deduction reduces self-employment tax as well as income tax (the 1099 set-aside guide shows both layers), while the sale of the car is a disposition governed by its own rules, which Publication 463 sends readers to Publication 544 to report. And the annual limits slow recovery of an expensive car. Treat a break-even within a few cents of the real running cost as a tie.
Four years side by side
The table sets the three paths next to each other for a $30,000 car driven 30,000 business miles a year, with 74.25 cents held for four years and the 28.1-cent example running cost. The sale is left out so every column shows deductions only.
| Year | Standard rate at 74.25 cents | Actual expenses, bonus in year 1 | Actual expenses, MACRS without bonus | Standard-rate basis reduction |
|---|---|---|---|---|
| 1 | $22,275 | $28,729 | $14,429 | $10,500 |
| 2 | $22,275 | $8,429 | $18,029 | $10,500 |
| 3 | $22,275 | $8,429 | $14,189 | $9,000 |
| 4 | $22,275 | $8,429 | $11,885 | $0 |
| Four-year total | $89,100 | $54,014 | $58,530 | $30,000 |
The standard rate is ahead of the MACRS path in every year and ahead of the bonus path from year two on: $89,100 over four years against $54,014 for bonus and $58,530 for MACRS. The bonus path leads in year one by $6,454. The $9,700 of cost above the $20,300 first-year limit does not come back as a second-year deduction: bonus depreciation already took the whole cost in year one, so under the regulations (Publication 463, "Deductions in years after the recovery period"; 26 CFR 1.280F-2T(c)) the unrecovered $9,700 becomes deductible only after the recovery period ends, at up to $7,160 a year. Revenue Procedure 2019-13 describes a safe harbor method for cars with 100 percent bonus depreciation that instead multiplies the $9,700 of remaining basis by the optional-table rate for each of years two through six (32, 19.2, 11.52, 11.52 and 5.76 percent), which recovers 80 percent of it by the end of year six, with the rest deductible after the recovery period at up to $7,160 a year (section 4.03 of the revenue procedure). It was issued for bonus depreciation under the 2017 Act and is an elective method of accounting. On the safe harbor the four-year bonus total is $60,098, which is still well behind the standard rate. Revenue Procedure 2026-15 does not mention the safe harbor, and none of the IRS documents listed under Sources addresses whether it applies to a car that takes the 100 percent allowance under the 2025 Act. Which timing a 2026 car follows, and whether to elect out of bonus depreciation instead, is a question for a tax professional to confirm before the return is filed. The table uses the regulation timing, and the totals use the unrounded running cost of $8,428.57 a year, so adding the rounded cells in a column can differ from its total by a couple of dollars. The standard rate's basis reduction reaches the full $30,000 in year three, after which the rate keeps paying while the actual-expense columns carry only running cost.
A costlier car to run changes the table. With the same car and miles but 50 cents of running cost per mile ($15,000 a year):
| Year | Standard rate at 74.25 cents | Actual expenses, bonus in year 1 | Actual expenses, MACRS without bonus | Standard-rate basis reduction |
|---|---|---|---|---|
| 1 | $22,275 | $35,300 | $21,000 | $10,500 |
| 2 | $22,275 | $15,000 | $24,600 | $10,500 |
| 3 | $22,275 | $15,000 | $20,760 | $9,000 |
| 4 | $22,275 | $15,000 | $18,456 | $0 |
| Four-year total | $89,100 | $80,300 | $84,816 | $30,000 |
The bonus path totals $80,300 against $89,100 for the standard rate, $8,800 behind, because $9,700 of its cost is still undeducted after year four. On the Revenue Procedure 2019-13 safe harbor described above the bonus total is $86,384, $2,716 behind. The MACRS path totals $84,816, $4,284 behind, because $5,184 of basis is still undepreciated after year four and comes back in years five and six or at sale. The four-year deductions-only columns leave out that remaining basis, which the lifetime formula counts: it gives a four-year tie at 49.25 cents (74.25 minus $30,000 over 120,000 miles), so 50 cents lands close to even once the remaining basis is deducted or lost on sale.
The timing differs between methods in a way single-year tables hide. This table compares a $30,000 car's MACRS depreciation with the standard rate's 35-cent component at 20,000 miles a year.
| Year | MACRS percentage | MACRS depreciation, no bonus | Cumulative MACRS | Standard-rate depreciation component at 20,000 miles | Cumulative standard-rate component |
|---|---|---|---|---|---|
| 1 | 20.00% | $6,000 | $6,000 | $7,000 | $7,000 |
| 2 | 32.00% | $9,600 | $15,600 | $7,000 | $14,000 |
| 3 | 19.20% | $5,760 | $21,360 | $7,000 | $21,000 |
| 4 | 11.52% | $3,456 | $24,816 | $7,000 | $28,000 |
| 5 | 11.52% | $3,456 | $28,272 | $2,000 | $30,000 |
| 6 | 5.76% | $1,728 | $30,000 | $0 | $30,000 |
MACRS gives $6,000 in year one against $7,000 from the standard component, then $9,600 against $7,000 in year two, and sits below it in years one, three and four. In years five and six MACRS is above it again, because the standard component has run out. Cumulatively MACRS is ahead after years two and three ($21,360 against $21,000 at the end of year three) and behind at the end of years one, four and five ($24,816 against $28,000 in year four). The standard component stops when the basis is used up, in year five at this mileage ($2,000 in the last year). Neither profile is better in every year, which is why the single-year tables and the lifetime formula can point in different directions for the same car.
The first-year choice on a car you own
Publication 463 (2025) states the rule for a car the driver owns: "If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Then, in later years, you can choose to use either the standard mileage rate or actual expenses." The choice is made by the due date of the return, including extensions. Under that rule, starting with the standard rate is the only start that leaves both methods open for the car.
The reverse path closes the door. Publication 463 says "You can claim a section 179 deduction and use a depreciation method other than straight line only if you don't use the standard mileage rate to figure your business-related car expenses in the year you first place a car in service." And: "If, in the year you first place a car in service, you claim either a section 179 deduction or use a depreciation method other than straight line for its estimated useful life, you can't use the standard mileage rate on that car in any future year." Revenue Procedure 2019-46, section 4.05(3), lists the same bars: no standard rate for a car on which the taxpayer has claimed depreciation other than straight line, a section 179 deduction, the additional first-year allowance, or MACRS. It adds: "By using the business standard mileage rate, the taxpayer has elected to exclude the automobile, if owned, from MACRS pursuant to § 168(f)(1)."
| What the first year used on a car you own | Standard rate in a later year | Actual expenses in a later year |
|---|---|---|
| Standard mileage rate | Allowed | Allowed, with straight-line depreciation over the remaining estimated useful life, up to the annual limit, on a basis already reduced by the per-mile depreciation amounts |
| Actual expenses with MACRS, a section 179 deduction or bonus depreciation | Not allowed on that car in any future year | Allowed |
The table puts the lock-in in one place. Starting with the standard rate keeps every later option except the accelerated methods, and starting with MACRS or a first-year write-off removes the standard rate from that car.
Other limits apply whatever the year. The rate cannot be used for five or more automobiles used simultaneously, as in fleet operations, and Publication 463 adds: "You aren't using five or more cars for business at the same time if you alternate using (use at different times) the cars for business." For a leased car, Publication 463 says "If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period," and section 4.05(2) of the revenue procedure allows either the standard rate or a fixed-and-variable-rate allowance for the whole lease period. Revenue Procedure 2026-15 also gives a table of income inclusion amounts for cars leased in 2026, which belongs to the actual-expense method on a leased car and is not worked here.
One terminology note for readers of the older guidance. Revenue Procedure 2019-46 refers throughout to a "suspension period" for miscellaneous itemized deductions. Notice 2026-10 explains that the One, Big, Beautiful Bill Act made that disallowance permanent, so the rate cannot be used to claim an itemized deduction for unreimbursed employee travel. Section 4.02 of the revenue procedure speaks to deductions in computing adjusted gross income: "Notwithstanding the suspension of miscellaneous itemized deductions, a taxpayer may use the standard business mileage rate in computing adjusted gross income under § 62(a)(1) or (2)." Notice 2026-10 states that taxpayers using the standard mileage rates must comply with Revenue Procedure 2019-46, except to the extent the law has been specifically changed by that Act.
Starting standard and switching to actual later
The standard-first path can end in the actual method, and the arithmetic of the switch is mechanical. Publication 463 says "You must reduce your basis in your car (but not below zero) by the amount of this depreciation," meaning the per-mile amounts for each year the rate was used, and the switch rule reads: "If you change to the actual expenses method in a later year, but before your car is fully depreciated, you have to estimate the remaining useful life of the car and use straight line depreciation for the car's remaining estimated useful life, subject to depreciation limits (discussed later)."
An illustration: a $25,000 car is bought in January 2026 and driven 20,000 business miles at the standard rate. The basis reduction is 20,000 times 35 cents, $7,000, leaving $18,000. If the driver switches to actual expenses in 2027 and estimates four more years of life, straight-line depreciation is $18,000 divided by 4, $4,500 a year at full business use, which is under the smallest annual limit in Revenue Procedure 2026-15 ($7,160). The estimate of remaining life is the driver's own, and the example is arithmetic on a stated assumption, not a recommended life. What the standard-first path rules out, for good, is MACRS and the first-year write-off on that car.
For a driver still finishing a 2025 return, three figures differ. The business rate for all of 2025 was 70 cents (Publication 463), the depreciation component was 33 cents, and the first-year limits for cars placed in service in 2025 were $20,200 with bonus and $12,200 without, with later-year limits of $19,600, $11,800 and $7,060. The flat part of the lifetime break-even for a 2025 return is therefore 70 minus 33, or 37 cents, instead of 39.3 cents.
Records and the miles that count
Every figure above assumes the miles are business miles and are documented. The standard rate multiplies business miles, and the business-use share in the actual-expense method is business miles over total miles, so both depend on the same log. Publication 463 lists what the record for a car must show: the cost of the car and any improvements, the date the car was first used for business, the mileage for each business use, and the total miles for the year. It also says a record prepared on a computer is considered adequate.
Which trips are business miles is a separate rule. Publication 463 treats daily trips between home and a regular place of work as commuting, and whether a given stretch of driving with the app on counts as business use depends on the facts of the work. The tables take the business-mile total from the driver's log as an input, and a driver whose log shows fewer business miles than total miles should use the business-share table above.
Testing your own car against the tables
The comparison takes four inputs. Total miles come from the odometer for the year and business miles from the log. Running costs for the year (fuel, repairs, tires, insurance, registration, anything else on the Publication 463 list) divided by total miles give the running cost per mile. The break-even comes from the year-one tables if the car is new to the business, or from the lifetime table, with the 72.5 and 76 cents weighted by the log's split at July 1. On a car you own, the first-year lock-in is the one part of the choice that cannot be undone.
The car depreciation calculator projects market value over time, a different quantity from tax depreciation, and the gap between the two is what a sale gain or loss measures. The self-employed math hub collects the set-aside, instalment and fee guides for the same kind of work, and the 1099 set-aside guide turns a larger or smaller deduction into dollars of federal tax at nine profit levels.
State income tax and the qualified business income deduction change what a larger deduction is worth, and neither is in these tables. Start the mileage log on the first day the car carries a passenger for pay, because the choice made in that first year is the one that cannot be undone.
Sources
- Internal Revenue Service, Standard mileage rates, page last reviewed or updated July 28, 2026; rows for 2025, 2026 (January 1 to June 30) and 2026 (July 1 to December 31). The July row's source column is labelled "IR-2026-29" and links to Internal Revenue Bulletin 2026-29. Checked November 3, 2026.
- Internal Revenue Service, Internal Revenue Bulletin 2026-29, July 13, 2026: Announcement 2026-11 (revised optional standard mileage rates, effective July 1, 2026). Checked November 3, 2026.
- Internal Revenue Service, Notice 2026-10, 2026 Standard Mileage Rates, 2026-4 I.R.B. 378: sections 2 to 4 (rates; basis reduction amounts of 33 cents for 2025 and 35 cents for 2026). Checked November 3, 2026.
- Internal Revenue Service, Revenue Procedure 2019-46, 2019-49 I.R.B. 1301: sections 4.02, 4.04 and 4.05. Checked November 3, 2026.
- Internal Revenue Service, Revenue Procedure 2026-15: sections 2 to 4 and Tables 1 and 2 (bonus depreciation for 2026 cars; depreciation limits for passenger automobiles placed in service in 2026). Checked November 3, 2026.
- Internal Revenue Service, Revenue Procedure 2019-13: sections 4.01 to 4.04 (excess over the first-year limit on a car with 100 percent bonus depreciation; elective safe harbor method of accounting). Checked November 3, 2026.
- Code of Federal Regulations, 26 CFR 1.280F-2T, paragraph (c) (unrecovered basis deductible in the first taxable year after the recovery period). Checked November 3, 2026.
- Internal Revenue Service, Publication 463 (2025), Travel, Gift, and Car Expenses, page last reviewed or updated April 30, 2026: chapter 4 (standard mileage rate, actual car expenses, depreciation limits, disposition of a car) and chapter 5 (records). The 2025 limits cited for 2025 cars are from this edition. Checked November 3, 2026.
- Fuel prices, running costs, vehicle prices and sale prices in the examples are inputs chosen for the arithmetic, not data. All tables are derived by CalculatorVillage from the cited rates and limits.