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.
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