The Basic Formula
Mileage reimbursement is calculated as: eligible miles × IRS standard mileage rate = reimbursement amount. For business travel in 2026, that is miles × $0.725. The same formula applies whether you are an employer reimbursing an employee or a self-employed taxpayer claiming a deduction.
The formula is simple, but the risk is in the inputs: using the wrong rate for the tax year, counting non-business miles, or failing to document the trips properly.
2026 IRS Mileage Rates at a Glance
| Purpose | Rate | Who Uses It | Tax Form |
|---|---|---|---|
| Business | 72.5¢/mile | Employees and self-employed | Schedule C (self-employed) |
| Medical | 20.5¢/mile | Taxpayers itemizing medical expenses | Schedule A |
| Moving (military) | 20.5¢/mile | Active-duty military | Form 3903 |
| Charitable | 14¢/mile | Qualified 501(c)(3) volunteers | Schedule A |
2026 IRS standard mileage rates by purpose.
Step-by-Step: Employee Reimbursement
1. Record each trip: date, destination, business purpose, and miles driven.
2. Sum total business miles for the reimbursement period.
3. Multiply total miles by the IRS business rate for the year the travel occurred.
4. Add any separately tracked tolls and parking fees.
5. Submit with a reimbursement form. Under an accountable plan, substantiate expenses within 60 days and return any excess reimbursement.
Step-by-Step: Self-Employed Deduction
1. Maintain a contemporaneous mileage log for the entire tax year.
2. At year-end, sum all business miles and multiply by the IRS business rate.
3. Enter the total on Schedule C, Line 9 (car and truck expenses).
4. Separately track and deduct tolls, parking, and the business-use portion of vehicle loan interest.
5. Retain the mileage log and supporting records for at least 3 years.
Common Calculation Mistakes
Using the wrong year rate: the rate applies to the date of travel, not the date of reimbursement. A December 2025 trip reimbursed in January 2026 uses the 2025 rate (70¢).
Including commuting miles: driving from home to your regular workplace is never deductible.
Blending rates: business, medical, and charitable mileage each use different rates and different tax forms.
Using estimates instead of odometer readings: round numbers or estimated distances may not hold up on audit.