Mileage Rates for 2025

The IRS has announced the 2025 standard mileage rates, effective January 1, 2025. These rates apply to taxpayers using a personal vehicle (cars, vans, pickups, or panel trucks) for various purposes:

• Business Travel: 70 cents per mile (up from 67 cents in 2024)
• Medical or Moving Purposes: 21 cents per mile (unchanged from 2024)
• Charitable Use: 14 cents per mile (fixed by law, remains unchanged)

Key Considerations:

• The business mileage rate is based on an annual study of both fixed and variable vehicle costs.
• The medical and moving mileage rates are based only on variable costs.
• Due to the Tax Cuts and Jobs Act, employees cannot deduct unreimbursed work-related mileage.
• Moving expense deductions are limited to active-duty military members relocating under orders.

For business mileage, the portion allocated to vehicle depreciation is 33 cents per mile in 2025.

Standard Mileage vs. Actual Expenses:

Taxpayers have the option to deduct actual vehicle expenses instead of using the standard mileage rate. However:

• If the standard mileage rate is used in the first year a car is placed in service, the taxpayer can later switch between methods.
• Leased vehicles must stick with the standard mileage rate for the full lease term if initially chosen.

For more details, refer to IRS Notice 2025-5 on the IRS website.