Gasoline prices have been a concern since the war with Iran began earlier this year. The fuel burden has squeezed the budgets of American households. Few know that the Internal Revenue Service (IRS) made an unusual mid-year update: It increased per-mile rates effective July 1. We explain what this means and how it affects you.

This July 13, the IRS explained in a bulletin that the agency's standard mileage rate increased by 3.5 cents per mile, bringing this benefit to 76 cents per mile as of July 1.

Taxpayers can apply for this new rate per mile optionally and as long as they use their car for commercial and work purposes. It does not apply for personal use of the vehicle or for trips to work.

These new rates will affect mileage starting July 1 and will be reflected on 2026 federal income tax returns filed next year. This means that those who file their federal tax return for 2026 must take into account two different rates: one for the first half of the year and another for tours made starting in July.

The IRS mileage rate is an amount set by the tax authority to calculate how much it costs, on average, to use a vehicle for specific purposes, such as work activities, medical care, or certain authorized trips. Instead of keeping every receipt for gas, maintenance or wear and tear on the car, many taxpayers can use this rate to calculate the corresponding expense.

The IRS measure comes after the upward variations in gasoline prices, which today are set at $3.94 per gallon, on average, according to the American Automobile Association (AAA).

Who can really take advantage of this benefit?

Although many people believe that any worker can deduct the use of their automobile, the reality is different since the tax reform that eliminated the deduction for unreimbursed work expenses for most employees.

The main beneficiaries continue to be independent workers, such as delivery drivers, contractors, real estate agents, technicians, salespeople or anyone who uses their vehicle to generate income and files their declaration as a self-employed worker.

There are also companies that reimburse their employees for the use of their personal automobile to carry out work activities. In those cases, they typically use the rate set by the IRS as a reference to calculate the payment. However, if the worker has already received that refund, they will not be able to claim that same amount again as a deduction on their tax return.

For many Latinos who are self-employed or perform home services, this change can translate into a better reimbursement or a higher tax deduction, as long as they keep proper records of the miles traveled for work.

Other rates per mile also increase

The IRS adjustment does not only apply to commercial activities. The rate for those who use a car, truck, van or commercial vehicle for qualified medical reasons increased to 23.5 cents per mile, that is, 3 cents more than what was in effect during the first half of 2026.

The same amount also applies as of July 1 for certain active-duty members of the Armed Forces and, now, for certain members of the intelligence community who carry out authorized transfers.

Instead, the rate for trips related to charity activities will remain unchanged throughout 2026 and will remain at 14 cents per mile, as that amount is set by law.

Why did the IRS make a change mid-year?

It is not common for the IRS to change these rates before the end of the tax year. Normally, the agency announces a single annual adjustment during December to apply it starting the following January. However, volatility in gasoline prices once again led the agency to intervene.

During the first months of 2026, the cost of fuel increased considerably after the start of the conflict between Israel and Iran in late February, a situation that also boosted inflation. Although national gasoline prices fell 9.7% in June compared to the previous month, they were still 26.7% above the level recorded a year earlier, according to data from the United States Bureau of Labor Statistics (BLS).

The most recent precedent occurred in 2022, when the IRS also raised the rate per mile starting July 1 due to the sharp increase in fuel prices. Before this extraordinary adjustment, the last mid-year modification had occurred in 2011.

An important detail for those who will present their declaration

If you are self-employed and use your car to generate income, it will be important to keep accurate track of the dates and miles driven throughout 2026.

Miles accumulated between January and June must be calculated with the rate corresponding to the first semester. En cambio, todos los recorridos realizados desde el 1 de julio utilizarán la nueva tarifa de 76 centavos por milla.

The IRS also reminded that these fees apply regardless of the type of vehicle used. This includes petrol, diesel, hybrid and fully electric cars.

This change can benefit hundreds of thousands of workers who rely on their car to visit customers, make deliveries or provide services, knowing this adjustment can make a difference when calculating refunds or preparing your next tax return.

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