Gas Prices at $4.29: How to Cut Costs and Deduct Mileage

If filling your tank hurts more than it did last year, you are not imagining it. Regular gas costs about $4.29 a gallon, roughly $1.22 more than a year ago. Prices have eased a little over the past month, but they are still high.

Here is what that means for your budget, a few ways to burn less fuel, and a tax rule many drivers miss: the IRS raised its mileage rate in the middle of the year because of fuel prices.

How much is gas right now?

AAA publishes a daily national average. On October 23, 2026, it showed:

The federal Energy Information Administration tracks prices a little differently, and its weekly number for October 19 was $4.284. Close enough to tell the same story. Its figure for diesel was $6.276 a gallon, which matters for truckers and anyone who hauls or delivers for a living.

Federal tax is part of every gallon you buy: 18.4 cents of the price on gasoline, according to the EIA. State taxes come on top, which is why prices differ so much from state to state.

Our September inflation post shows how much of the recent jump in prices comes from gasoline.

What does $4.29 gas cost me?

Here is an illustration, not a prediction. Say you drive 12,000 miles a year in a car that gets 25 miles per gallon.

• Gallons used: 12,000 ÷ 25 = 480 gallons a year.
• At $4.29 a gallon: 480 × $4.29 = $2,059.20 a year.
• At last year’s $3.07: 480 × $3.07 = $1,473.60 a year.
• Difference: $2,059.20 − $1,473.60 = $585.60 more per year, or about $49 a month.

Your numbers will differ with your car and your commute. A pickup that gets 15 miles per gallon uses 800 gallons for the same 12,000 miles, so it feels the jump much harder. Put your own fuel costs into our budget calculator to see where the extra money comes from.

How can I use less gas?

The U.S. Department of Energy runs fueleconomy.gov, which publishes these tips:

• Slow down. Gas mileage usually drops quickly above 50 mph. Slowing down 5 to 10 mph saves 7% to 14% of fuel, assuming gas at $4.28.
• Go easy on the pedals. Speeding, rapid acceleration and hard braking can lower mileage by about 15% to 30% at highway speeds and 10% to 40% in stop-and-go traffic.
• Don’t idle. An idling engine burns a quarter to a half gallon an hour. Restarting takes about 10 seconds’ worth of fuel, so turning the engine off pays off if you will wait longer than a minute.
• Lose the extra weight. An extra 100 pounds cuts mileage by about 1%.
• Take off the roof box. A big cargo box on the roof can cut fuel economy by about 6% to 17% on the highway.

To see what that could be worth, take the 480-gallon driver at $4.29. Saving 7% is 480 × $4.29 × 0.07 = about $144 a year, and saving 14% is about $288. That assumes you were driving fast enough to benefit, so treat it as a best case.

Did the IRS change the mileage rate because of gas prices?

Yes. The IRS sets standard mileage rates each year, and this year it changed them on July 1. Announcement 2026-11 says the change “results from recent increases in the price of fuel.” The new rates apply to miles driven on or after July 1, 2026.

The charity rate is fixed by law, so fuel prices do not change it. The IRS standard mileage rates page lists all of these, and our 2026 mileage rate reference has totals for common distances.

Who can use the 76-cent rate?

Most people cannot use it to deduct driving to their regular job. The IRS says in Topic 510 that “most employees cannot deduct unreimbursed car expenses.” The exceptions include:

• Self-employed people, who deduct car expenses on Schedule C
• Members of the Armed Forces and military reservists
• Certain performing artists
• Fee-basis state or local government officials

If you use the standard mileage rate for a car you own, the IRS says you must choose it in the first year the car is available for business use. In later years you can switch to actual expenses. You also need adequate records, such as a mileage log.

Here is an illustration for a self-employed delivery driver who drove 10,000 business miles, split evenly across the year:

• First half: 5,000 × $0.725 = $3,625
• Second half: 5,000 × $0.76 = $3,800
• Total deduction: $7,425
• Under the 2025 rate of 70 cents, the same miles would be 10,000 × $0.70 = $7,000.

If that driver were in the 22% federal bracket, a $7,425 deduction would lower federal income tax by about $1,634. That ignores self-employment tax and state tax. Your own result depends on your income.

What about medical and charity driving?

The medical rate is 23.5 cents a mile now, but medical costs are deductible only if you itemize, and only the amount above 7.5% of your adjusted gross income (Topic 502).

Charity driving at 14 cents a mile counts only if you itemize, says the IRS (Topic 506). Starting with 2026, people who do not itemize can deduct up to $1,000 ($2,000 if married filing jointly) of cash gifts to certain qualified organizations, but that rule covers cash, not mileage.

What to do now

1. Check your real fuel cost. Add up what you spent on gas last month and compare it with last year. Our inflation calculator can help you see the gap.
2. Change one driving habit. Slowing down on the highway is the easiest, free way to cut fuel use.
3. Remove what you don’t need. Roof boxes, racks and heavy items in the trunk cost you money every mile.
4. If you drive for self-employment, keep a mileage log. Write down the date, miles, and the business reason for each trip. You need records to claim the deduction.
5. If you are an employee, ask about reimbursement. Your employer may pay mileage under an accountable plan. Ask HR what the policy is for the second half of 2026.
6. Rework your budget. Use the budget calculator with today’s gas price, not last year’s.

This article is general information, not personal financial or tax advice. For decisions about your own money or taxes, consider talking with a qualified professional.