'For Parsons employees, the recent increase in the IRS standard mileage rate presents an excellent opportunity to maximize business-related deductions, offering immediate tax savings for those who rely on their personal vehicles for work-related travel,' said Kevin Landis, a representative of The Retirement Group, a division of The Retirement Group.

'With the IRS raising the standard mileage rate for business use, Parsons employees should be sure to take advantage of this favorable adjustment, ensuring they capture every possible d eduction while managing the increased costs of vehicle operation,' said Paul Bergeron, a representative of The Retirement Group, a division of The Retirement Group.

In this article we will discuss:

• 1. The increase in standard mileage rates for business, medical, and moving purposes.

• 2. The specific deductions available for Parsons employees based on mileage usage.

• 3. How to take advantage of the 2026 standard mileage rates for vehicle-related tax deductions.

Each year, the Internal Revenue Service sets the optional standard mileage rates for calculating the deductible costs of operating an automobile for business, medical, and relocating purposes (IRS Notice 2026-10). The standard mileage rate used to calculate the deductible costs of operating a vehicle for charitable purposes is established by statute and is not subject to annual adjustment.

For January 1, 2026, through December 31, 2026, the standard mileage rates are as follows:

• Business use of auto : Our Parsons customers may find this to be especially advantageous. If a vehicle is used for business purposes, a deduction of 72.5 cents per mile is allowed. As an Parsons employee, your employer may reimburse you for business-related travel expenses at the per-mile rate. Nevertheless, if Parsons does not reimburse you for business-related travel expenses, you cannot deduct these costs as miscellaneous itemized deductions.

• Charitable use of auto : 14 cents per mile (set by statute; unchanged) may be deducted if a vehicle is used to provide services to a charitable organization if you itemize your deductions on your tax return. Depending on the type of charity, your charitable deduction may be limited to a certain percentage of your adjusted gross income. We would like Parsons customers to be aware of this.

• Medical use of auto : 20.5 cents per mile may be deducted if a vehicle is used to obtain medical care (or for other deductible medical purposes) if you itemize your deductions on your tax return. Also essential for Parsons customers to remember is that you can only deduct the portion of your medical and dental expenses that exceeds 7.5% of your adjusted gross income.

The IRS typically revises the standard mileage rates in the autumn for the following calendar year. The IRS announces updated standard mileage rates each year. For 2026, the IRS set the standard mileage rate for business use of an automobile at 72.5 cents per mile -- an increase of 2.5 cents from the 2025 rate of 70 cents per mile. This rate can be particularly advantageous for Parsons workers who frequently use their personal vehicles for business-related purposes. It allows them to potentially claim higher deductions for their mileage expenses when calculating their tax returns. This increase reflects the ongoing costs of fuel and vehicle operation, offering some relief to individuals who rely on their vehicles for work-related travel. (Source: Internal Revenue Service, Notice 2026-10)

Imagine you're navigating a road trip to financial well-being in retirement. Along the way, you encounter different toll booths that determine the deductions you can claim for your vehicle expenses. For 2026, the IRS has set its rate at 72.5 cents per mile for business use, allowing you to enjoy more deductions for business-related mileage. It's like finding a new, more affordable route that saves you money on toll fees. As a Parsons traveler, this can be especially advantageous, as you can now claim 72.5 cents per mile for business use, up from 70 cents in 2025. Just as a savvy driver selects the most cost-effective path, taking advantage of the increased standard mileage rates can steer you closer to your financial destination, providing you with added tax benefits for the miles you travel on your professional journey.

That same shift from growing assets to drawing them down applies directly to the pension decisions in front of you at Parsons. Without a traditional pension, your 401(k) - alongside Social Security - forms the foundation of your retirement income at Parsons. Parsons may offer a 401(k) employer match - review your Summary Plan Description for current match rate and vesting details. Your overall withdrawal strategy, account sequence, and Roth conversion opportunities leading up to and into retirement deserve careful, personalized analysis given the income-sequencing implications.

On the healthcare side, Parsons does not offer continued medical coverage to retirees, which means coverage through the company ends when employment does. Planning for the cost of health insurance during any gap between your retirement date and Medicare eligibility at age 65 is a critical step - marketplace coverage, COBRA continuation, or a spouse's employer plan are common options. Building an accurate estimate of bridge-coverage costs into your retirement income projection prevents underestimating one of the largest variable expenses retirees face. Connecting your specific Parsons benefits situation to a comprehensive retirement income plan - and understanding how each component interacts - gives you the most complete picture of what retirement will look like.

Sources:

1. Internal Revenue Service. IRS Issues Standard Mileage Rates for 2025 . U.S. Department of the Treasury, 17 Dec. 2025, irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2025 .

2. Internal Revenue Service. IRS Increases Mileage Rate for Remainder of 2025 . U.S. Department of the Treasury, 9 irs.gov/newsroom/irs-increases-mileage-rate-for-remainder-of-2025 .

3. Miller, Stephen. IRS Raises Standard Mileage Rate for Final Half of 2025 . SHRM, 9 shrm.org/topics-tools/news/benefits-compensation/irs-raises-standard-mileage-rate-final-half-2025 .

4. 'IRS Releases 2025 Mileage Rates and Vehicle Values.' NFP , 17 Dec. 2025, nfp.com/insights/irs-releases-2025-mileage-rates-and-vehicle-values .

5. 'IRS Revises Optional Standard Mileage Rates.' NFP , 22 nfp.com/insights/irs-revises-optional-standard-mileage-rates .