On December 29, 2025, the Internal Revenue Service issued the 2026 standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. 

Beginning on January 1, 2026, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:

• 72.5 cents per mile driven for business use (up 2.5 cents from the 2025 rate.
• 20.5 cents per mile driven for medical, or moving purposes for qualified active-duty members of the Armed Forces (this is down .5 cents from 2025).

Why It Matters in Affordable Housing

In affordable housing, these rates become a factor when calculating net income from some businesses that families may be involved in (such as gig economy drivers with Uber, Lyft, or Grubhub) or when calculating medical expense deductions for mileage to and from medical treatment or appointments for subsidized rent programs. As vehicle-related self-employment that may involve mileage has been a HUGE emerging issue in recent years, we think that this is very timely!

Some interesting side notes: for business use of a vehicle, taxpayers can use the standard mileage rate, but must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or another calculation based on actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.
 

Below is an excerpt from the forthcoming Costello Compliance online on-demand course series, Succeed at Qualifying Households for Affordable Housing. For a catalog of Costello University training courses see HERE.