Among other tax law changes for 2026, the Internal Revenue Service announced that the optional standard mileage rate for business use of automobiles will increase by 2.5 cents from last year making the current rate 72.5 cents per mile.
However, mileage driven for medical or moving purposes for certain active-duty members of the Armed Forces (and now certain members of the intelligence community) has decreased by half a cent from 2025. A December press release by the IRS explained the minor decrease reflected updated cost data and annual inflation adjustments.
Miles driven for charitable organizations will stay at 14 cents per mile, which is the same rate as last year. Taxpayers have a choice between using the standard mileage rates and calculating the actual costs of using their vehicle.
Also in December, the IRS updated information regarding the limitation on the deduction for business interest expense under President Trump’s “One Big, Beautiful Bill Act (OBBBA).” For tax years beginning after Dec. 31, 2024, the new act amended Section 163(j) by allowing taxpayers to add back deductions for depreciation, amortization or depletion when calculating Adjusted Taxable Income.
According to the press release, the act also expands “the definition of floor plan financing interest to treat, as a motor vehicle, any trailer or camper designed to provide temporary living quarters for recreational, camping or seasonal use and designed to be towed by, or affixed to, a motor vehicle.”
In addition, for tax years beginning after Dec. 31, 2025, the new tax act also amended statutes by “clarifying that business interest expense subject to Section 163(j) includes any interest incurred and capitalized during the tax year, except for interest capitalized under Sections 263(g) and 263A(f).
It also excludes “a U.S. shareholder’s controlled foreign corporation income inclusion items under Sections 951(a), 951A(a) and 78, and associated deductions, from the computation of Adjusted Taxable Income.
Highlights
The IRS posted on their website, irs.gov, an itemized list of how the OBBBA significantly affects federal taxes, credits, and deductions. It was signed into law on July 4, 2025, as Public Law 119-21 and took effect in 2025.
Provisions are broken down into sections on the website and cover how the changes affect businesses, families and dependents, individuals, investment and community development, clean energy, tax exempt entities and charitable giving and other taxes such as Dyed Fuel Claims and Excise Tax on certain remittance transfers.
Standard deduction increases are one of the highlights for individual or married tax filers. In 2026, $32,200 can be claimed for married couples filing jointly compared to $31,500 in 2025; $16,100 for single filers and married individuals filing separately compared to $15,750 in 2025; and $24,150 for heads of household compared to $23,625 in 2025.
Also, a “senior deduction” is highlighted in the new tax law, which will apply to tax years 2025-2028. Individuals age 65 and older may claim an additional $6,000 deduction. This is in addition to the standard deduction for seniors available under existing law. For a married couple where both spouses qualify it is a $12,000 deduction. The IRS noted that this additional deduction phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers.)
Other highlights for individuals include no tax on tips, no tax on overtime, no tax on car loan interest and health savings account expansion for participants. For explanations and requirements for all new tax provisions under the OBBBA, refer to irs. gov.
Debi DeSilver is an award-winning, third-generation Oklahoma journalist whose writing career now spans 50 years. She can be reached at silvercitypublishing@ mailto:publishing@gmail.com gmail.com.