The IRS has updated the standard mileage rates for the second half of 2026. In addition, several federal tax law changes that took effect in 2026 will affect many taxpayers.
Federal Mileage Rates
July 1 – December 31, 2026
- Business: 76 cents per mile
- Medical: 23.5 cents per mile
- Charitable: 14 cents per mile
January 1 – June 30, 2026
- Business: 72.5 cents per mile
- Medical: 20.5 cents per mile
- Charitable: 14 cents per mile
For additional information, see the Standard Mileage Rate page on the IRS website.
Tax Deferral on the Sale of Farmland to a Qualified Farmer
The One Big Beautiful Bill created a new provision allowing qualified sellers of farmland to elect to pay the federal income tax on the gain from the sale in four equal annual installments when the property is sold to a qualified farmer.
To qualify:
- The farmland must be located in the United States.
- The property must have been used substantially for farming by the seller for at least 10 years before the sale.
- The buyer must be an individual who is actively engaged in farming.
To elect the tax deferral, the qualified seller must complete Form 1062, Deferral of Tax on Gain from the Sale or Exchange of Qualified Farmland Property to Qualified Farmers, and attach it to the federal income tax return for the year of sale.
If the election is made, the tax due on the gain is paid in four equal annual installments – one installment in the year of sale and one installment in each of the following three years.
For additional information, see the Form 1062 Instructions on the IRS website.
Other Federal Tax Law Changes Effective in 2026
Charitable Contribution Deduction Changes
Several changes to the charitable contribution deduction became effective beginning with tax year 2026.
Taxpayers Who Do Not Itemize
Taxpayers who claim the standard deduction may now deduct up to:
- $1,000 of cash charitable contributions ($2,000 for Married Filing Jointly).
Taxpayers Who Itemize
The following changes apply to taxpayers who itemize deductions:
- Charitable contributions are deductible only to the extent they exceed 0.5% of the taxpayer’s Adjusted Gross Income (AGI). As a result, total charitable contributions are reduced by 0.5% of AGI.
- For taxpayers in the 37% tax bracket, the charitable contribution deduction is limited to the 35% tax rate.
- These changes are reflected on Schedule A, which now includes a new Charitable Contributions Limitation Worksheet in the Schedule A instructions.
Child and Dependent Care Credit (Form 2441)
Beginning in 2026:
- The maximum credit percentage for eligible expenses has increased to 50%.
- The minimum credit percentage has increased to 35%.
- The credit percentage decreases by 1% for every $2,000 increase in income, from a maximum of 50% down to a minimum of 35%.
Educator Expense Deduction
Beginning in 2026, the educator expense deduction consists of two parts:
- Eligible educators may deduct up to $350 ($700 for Married Filing Jointly) of qualified educator expenses as an adjustment to income on Form 1040, Schedule 1.
- Eligible educators who itemize deductions may also deduct qualified educator expenses above $350 ($700 for Married Filing Jointly) as an itemized deduction on Schedule A, Line 17k.
