Trump rolls out Freedom Fuel gas stations, what is that?
President Trump’s Freedom Fuel sells gasoline for $3.47 a gallon in Pennsylvania and New Jersey.
- Businesses that reimburse employees for mileage driven for business often follow IRS mileage rates. If reimbursed, the employee cannot claim any deductions.
- According to the National Association of Tax Professionals, it’s not common for the IRS to change direction mid-year and increase mileage rates.
Drivers may not be familiar with it yet, but the Inland Revenue has introduced new, higher mileage rates from July 1st.
After some tough times in the first half of 2026, the IRS took the unusual step of starting a new standard mileage rate in the second half of the year. After the Iran war began in late February, gasoline prices soared for a while, fueling inflation.
Starting July 1, the IRS standard mileage rate will increase by 3.5 cents per mile, and the optional mileage rate for commercial vehicles will increase to 76 cents, according to an IRS bulletin issued July 13. The IRS has not issued a press release regarding mileage rate changes.
The new rates will apply to mileage after July 1, 2026, and will be reflected on your 2026 federal income tax return filed next year.
After changes in tax law that eliminated unpaid employee business expenses, many drivers are not claiming mileage deductions on their federal income tax returns. But some drivers are benefiting.
Businesses that reimburse employees for mileage driven for business often follow IRS mileage rates. If reimbursed, the employee cannot claim any deductions.
The separate mileage rate for passenger car, van, pickup or panel truck use driven for qualifying medical reasons is up to 23.5 cents per mile. This change is an increase of 3 cents compared to the 2026 first half rate.
The mileage rate for some active-duty military members (and now some members of the intelligence community) for travel purposes also increased to 23.5 cents per mile starting July 1, an increase of 3 cents per mile from the beginning of 2026, according to an IRS bulletin.
According to the National Association of Tax Professionals, it’s not common for the IRS to change direction mid-year and increase mileage rates. For the latest changes, you have to go back four years.
2022 was such a volatile year for gas prices that the IRS decided to increase mileage rates for some of the second half of 2022 starting in July. Prior to that, the IRS last made a mid-year action in 2011.
In 2022, the IRS increased the business standard mileage rate from 58.5 cents for the first six months of the year to 62.5 cents for the last six months of the year. This change will be announced on June 9, 2022 and will take effect from July 1, 2022.
But anyone who drives knows it’s been another crazy year when it comes to gas prices.
Gasoline prices nationwide fell in June, dropping 9.7% from the previous month, according to new information from the Consumer Price Index for All City Consumers released by the U.S. Bureau of Labor Statistics on Tuesday, July 14th. Based on year-on-year data, gasoline prices continued to rise by 26.7% in June.
Gasoline prices fell last month after there were signs of hope in negotiations between the United States and Iran over the Middle East conflict. However, the situation in the Middle East remains unstable, making it difficult to know what direction gasoline prices will take for the remainder of 2026.
When it comes to IRS mileage rates, self-employed individuals can claim business mileage on their tax returns. Those filing their 2026 returns next year will need to take into account both the announced tax rates: the lower rate for the first half of this year and the higher rate starting July 1.
The mileage rate for driving in charity services will remain at 14 cents in 2026. This rate is set by law and will not change.
The IRS has previously noted that these rates apply not only to gasoline and diesel vehicles, but also to fully electric and hybrid vehicles.
The annual business mileage rate changes for next year, published in December, are based on an annual review of the fixed and variable costs of operating a vehicle. On the other hand, charges for medical and moving purposes are based solely on variable costs from the annual survey.
Contact personal finance columnist Susan Tompol: stompor@freepress.com. follow himr X @tompor.
