Insights
2026 IRS Standard Mileage Rate Increase
The IRS has announced an increase to the optional standard mileage rate for 2026. Taxpayers can use this rate to calculate the deductible cost of operating a vehicle for business, medical, or moving purposes. Beginning January 1, 2026, the business mileage rate rises to 72.5 cents per mile, up 2.5 cents from 2025 — reflecting continued increases in fuel, maintenance, and insurance costs. The medical and moving mileage rate has decreased slightly to 20.5 cents per mile, while the charitable rate remains unchanged at 14 cents per mile. For more, see the IRS announcement.
Tax on Overtime: What you need to know
Under the One, Big, Beautiful Bill, eligible workers can now deduct qualified overtime compensation from their federal taxable income. For tax years 2025 through 2028, individuals may deduct the portion of their overtime pay that exceeds their regular rate — generally the "half" in "time-and-a-half" — up to a maximum of $12,500 per year, or $25,000 for joint filers. The deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers), and is available whether you itemize or take the standard deduction. Starting with the 2026 tax year, employers will be required to separately report qualified overtime compensation on Form W-2 using Box 12, Code TT, making it easier to identify and claim. It's important to note this is a deduction, not a full exemption — overtime pay is still subject to Social Security and Medicare taxes. For more, see the IRS overview. Internal Revenue Service