What the 2026 IRS standard mileage rate is
For 2026, the IRS set the optional standard mileage rate for business use of a car, van, pickup, or panel truck at 72.5 cents per mile — an increase of 2.5 cents from the 70-cent rate that applied in 2025. The IRS announced the new rate in its notice, IRS sets 2026 business standard mileage rate at 72.5 cents per mile.
The standard mileage rate is the simple way to deduct vehicle costs. Instead of tracking every fuel receipt, oil change, tire, and depreciation figure, you multiply your business miles by the rate and you have your deduction. The rate is recalculated each year to reflect the cost of operating a vehicle, which is why it drifts up over time.
There is a second way to deduct vehicle costs — the actual-expense method, where you total your real vehicle costs and deduct the business-use share. Which method comes out ahead depends on your vehicle, your mileage, and your costs. This article focuses on the standard mileage method because it's the one most small service businesses use and the one the new rate applies to. Your tax professional can tell you which method is better for you.
What 72.5¢ a mile means for a field service business
A service business is a driving business. Your technicians don't sit at a desk — they go to the customer, then the next customer, then the supply house, then back out. Those miles add up fast, and at 72.5 cents each they carry a real deduction.
Put a number on it. A technician who drives 20,000 business miles in 2026 has an estimated deduction of about $14,500 — that's 20,000 multiplied by $0.725. Run a few trucks and the company-wide figure climbs into the tens of thousands. The catch is that the deduction is only as good as your records. Miles you didn't log are miles you can't deduct, and most businesses under-capture badly — the quick supply runs, the second trip back for a part, the free estimate across town all quietly go unrecorded.
A twelve-mile round trip to the supply house is about $8.70 in deduction at the 2026 rate. Skip a couple of those a day across a few trucks and you've left a four-figure deduction on the table by December.
Business miles vs. commuting: the line that trips people up
Not every mile counts. The most common mistake is treating the morning drive to the first job and the evening drive home as deductible. Generally, the IRS treats travel between your home and a regular place of work as commuting, and commuting miles are not deductible.
What typically does count are the business miles you drive during the workday: from one job site to the next, to the supply house mid-job, and out to customer estimates. The rules around home offices, temporary work locations, and a regular place of business get nuanced, so the safe move is to log every drive and let your tax professional sort the deductible miles from the commute. You can't apply the rule to a mile you never recorded.
What the IRS wants to see in a mileage log
The standard mileage method still requires records. The IRS expects a log that is contemporaneous — made at or near the time of the trip, not reconstructed from memory the week before you file. For each business trip, a solid record shows four things:
The date of the trip. The destination — where you drove. The business purpose — why the drive was a business trip. And the miles driven. The recordkeeping rules for car and travel expenses are laid out in IRS Publication 463, which is the document your accountant will reference.
A shoebox of gas receipts is not a mileage log. A handwritten notebook in the glovebox can work, but it falls apart in practice — entries get skipped on busy days, miles get estimated after the fact, and the whole thing gets reconstructed at tax time, which is exactly the kind of record the IRS views skeptically. The reliable approach is a record that gets written automatically as each drive happens, while the details are still fresh.
How FSM Navigator captures mileage automatically
If you already dispatch jobs through FSM Navigator, the mileage record can write itself. When a technician marks a job En Route in the mobile app and then Arrived on site, FSM Navigator captures that drive automatically — and links it to the job and the customer it belongs to. Every dispatch becomes a logged, contemporaneous mile, tied to a real business purpose, recorded at the moment it happens rather than reconstructed in April.
At year end you export a CSV of every trip — date, destination, business purpose, and miles — ready to hand to your accountant. The per-mile rate defaults to the IRS standard of 72.5 cents, so the estimated deduction is calculated the way the IRS expects. It's an IRS-ready record built into the software your team already uses, not a second app your technicians have to remember to open.
Mileage tracking is available on the Pro and Enterprise plans. You can see how the feature works on the mileage tracking page, and the FSM Navigator platform itself is free for up to 5 users. As always, the records are yours to export, and your tax professional decides which miles are deductible and which method to use.
The bottom line on the 2026 rate
The 2026 business standard mileage rate is 72.5 cents per mile, up 2.5 cents. For a business that drives all day, the deduction is meaningful — but only the miles you actually record can be claimed. The single biggest improvement most service businesses can make is to stop reconstructing mileage at tax time and start capturing it automatically as each drive happens. Get the record right and the rate takes care of the rest.
This article is general information, not tax advice. Rules on deductible miles and recordkeeping have specifics that depend on your situation — confirm yours with a qualified tax professional. Related reading: the hidden cost of manual dispatch.