Updated August 7, 2026. Quick answer: if you drove for work in 2026, you have to split the year in half. The IRS set the business standard mileage rate at 72.5 cents per mile for 1 January to 30 June 2026, then raised it mid-year to 76 cents per mile for 1 July to 31 December 2026. A single rate applied to the whole year will be wrong in both directions. Most guidance published before July still shows one rate, and mileage is usually the largest deduction a consultant actually has.
The 2026 mid-year split
| Period | Business rate |
|---|---|
| 1 Jan – 30 Jun 2026 | 72.5 cents per mile |
| 1 Jul – 31 Dec 2026 | 76 cents per mile |
| 2025 (whole year, for comparison) | 70 cents per mile |
Mid-year changes are rare, which is exactly why this one will be missed: the habit of looking up “the 2026 mileage rate” returns one number, and for half the year it is the wrong one. The practical requirement is that your mileage log has dates in it — a total for the year cannot be split after the fact, and reconstructing it from memory is precisely what the substantiation rules are designed to catch.
The standard the deduction actually has to meet
The deductible-expense test is not a list, it is a standard: an expense has to be ordinary and necessary for the business, and you have to be able to show it. That is why the record matters more than the category. A defensible expense with no contemporaneous record is in a worse position than a modest one that is fully documented — and the IRS is explicit that no particular system is required, only that it clearly shows income and expenses.
This page does not publish a list of deduction categories with percentages, and that is deliberate. The rules for meals, for vehicles beyond the standard rate, and for mixed personal-and-business items each carry conditions and limits that we did not verify in this pass, and a half-verified list is how a reader ends up confidently claiming something they should not. Where we could verify a figure — the mileage rates above, and the $5-per-square-foot home office method — it is here with its source. Where we could not, it is absent rather than approximated.
The line under all of it
None of this applies to an activity that is not a business. The IRS defines the boundary by intent and tests it on facts: “A hobby activity is an activity not done for profit. This includes activities done mainly for sport, recreation, or pleasure”, and it lists factors including “Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records” and “Whether you depend on income from the activity for your livelihood.”
Notice that the first factor is the bookkeeping itself. The records are not only how you substantiate the deductions — they are part of how the activity qualifies as a business at all. The encore-business version of this line, and what it means for an activity run partly for enjoyment, is covered on its own page, which owns that question.
Before the deductions matter
Two structural things are worth more than any single deduction: the separate account, without which none of this is provable, and the retirement account the income unlocks, which for most encore businesses shelters more than the deductions save.
Sources and limits
Mileage rates read 2026-08-07 from the IRS’s Standard mileage rates table, which lists both 2026 periods separately; the hobby definition and factors from the IRS’s business income and expenses FAQs. We did not verify the current treatment of hobby expenses and therefore do not state it, and we did not verify meals or actual-vehicle-cost rules. General information, not tax advice.
Chart from this page’s data — free to reuse under CC BY 4.0, with the source drawn inside the image. The full chart library has the rest.