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January 16, 2025

Minute Read


Attention business owners! IRS standard mileage rates for 2025 have increased. Find out how to maximize your deductions. 

The IRS has released the standard mileage rates for 2025, providing important tax guidance for individuals and businesses who track vehicle expenses. 

The 2025 IRS mileage rates reflect the changing costs of vehicle operation, with a notable increase in the business use rate. These rates offer taxpayers a standardized method for calculating deductible vehicle-related expenses on their tax returns.

This post will help you understand and properly apply these rates so you can maximize your deductions and comply with tax regulations.

FAQs

Q1: Who can claim mileage deductions using these rates?

A1: The business mileage rate can be used by self-employed individuals and some employees for unreimbursed business travel. The charitable and medical rates can be used by anyone who itemizes deductions on their tax return.

Q2: Can I use the IRS mileage rates if I’m an employee?

A2: If your employer reimburses you at the IRS rate, you cannot claim an additional deduction. If you’re not reimbursed, you may be able to deduct unreimbursed expenses in certain situations.

Q3: How do I track my mileage for tax purposes?

A3: Keep a detailed log of your trips, including the date, destination, purpose, and miles driven. Many mobile apps can help you track this information automatically.


Mileage Rate Updates

The IRS has increased the optional standard mileage rates for computing the deductible costs of operating an automobile for business purposes for 2025.

The standard mileage rates for medical and moving expense purposes remain the same for 2025.

The standard mileage rate for computing the deductible costs of operating an automobile for charitable purposes is set by statute and remains unchanged.

For 2025, the standard mileage rates are as follows:

Business Use Standard Mileage Rate

70 cents per mile (up from 67 cents for 2024) may be deducted if an auto is used for business purposes.

If you are an employee, your employer can reimburse you for your business travel expenses using the standard mileage rate.

However, if you are an employee and your employer does not reimburse you for your business travel expenses, you cannot currently deduct your unreimbursed travel expenses as miscellaneous itemized deductions.

Charitable Use Standard Mileage Rate

14 cents per mile (the same as for 2024) may be deducted if an auto is used to provide services to a charitable organization if you itemize deductions on your income tax return.

Your charitable deduction may be limited to certain percentages of your adjusted gross income, depending on the type of charity

Medical Use Standard Mileage Rate

21 cents per mile (the same as for 2024) may be deducted if an auto is used to obtain medical care (or for other deductible medical reasons) if you itemize deductions on your income tax return.

You can deduct only the part of your medical and dental expenses that exceeds 7.5% of the amount of your adjusted gross income

Moving Expense Standard Mileage Rate

21 cents per mile (the same as for 2024) may be deducted if an auto is used by a member of the Armed Forces on active duty to move, pursuant to a military order, to a permanent change of station (unless such expenses are reimbursed).

The deduction for moving expenses is not currently available for other taxpayers

The 2025 IRS mileage rates reflect the changing costs of vehicle operation, with a notable increase in the business use rate. Understanding and properly applying these rates can help you maximize your deductions and comply with tax regulations. Remember to keep accurate records and consult with a tax professional for personalized advice on how these rates apply to your specific situation.

Contact your tax and financial advisors to determine the best moves for your situation.


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