Get more back for your miles with the IRS’s updated rates.
If you use your vehicle for business purposes, there’s good news. Starting in 2025, the IRS is increasing the standard mileage rate for business use to 70 cents per mile, a nearly 4.5% boost from 67 cents in 2024. This change reflects rising vehicle-related costs and could mean more savings for taxpayers like you.
What Is the Standard Mileage Rate?
The standard mileage rate is a per-mile amount you can deduct for eligible business, medical, and charitable travel. For 2025:
- Business use: 70 cents per mile
- Medical use: 21 cents per mile
- Charitable use: 14 cents per mile
If you're in the military and moving due to a permanent change of station, you can deduct 21 cents per mile.
This deduction applies to all types of vehicles, including gasoline, diesel, hybrid, and fully electric.
Why the IRS Mileage Deduction Increased
Vehicle expenses have soared, driven by rising costs of insurance, maintenance, and repair. According to Motus, a company specializing in vehicle reimbursements, these factors are reshaping driving costs. While fuel prices have dipped, they’re just one part of the equation. As Motus CEO Phong Nguyen puts it:
“It’s essential for businesses to implement fair and accurate reimbursement strategies.”
Choosing Between Standard Mileage or Actual Expenses
You have two ways to claim your vehicle expenses:
- Standard Mileage Rate – Simple and easy. Deduct a fixed rate per mile driven for business purposes.
- Actual Expenses – More detailed but potentially more lucrative. This includes costs like gas, oil, repairs, insurance, depreciation, tolls, and parking fees.
If you own a vehicle, the IRS requires you to pick your method in the first year it’s used for business. After that, you can switch between the standard mileage rate and actual expenses.
What You Need to Track
Claiming vehicle deductions means keeping accurate records. Here’s what you need:
- Dates and purpose of business trips
- Starting and ending odometer readings
- Mileage logs
- Receipts for tolls, parking, and other related expenses
Keeping detailed records isn’t just smart—it’s your safety net if the IRS comes calling. Experts recommend retaining these logs for as long as your tax records are subject to audit.
Check out this guide on mileage tracking for tips on simplifying your record-keeping.
Maximize Your IRS Mileage Deduction Savings
With the IRS’s new mileage rate, you could see bigger deductions if you use your vehicle for work. Whether you’re self-employed or driving for an employer, these changes make it worth reviewing your strategy for 2025.
Stay organized, track your miles, and take advantage of every deduction you’re entitled to.
Need Help with Tax Deductions?
If you have questions about tax-savvy deductions—or need help determining what is most effective for your situation—contact Tax Problem Solver today. Our team is here to guide you through your tax strategies.
And, of course, if you find yourself with tax problems of any kind, don't hesitate to contact us for help and guidance. That's what my team and I are here for.
You can contact me by one of the methods below in the blue box, or email me at Larry@TaxProblemSolver.com and we can review your specific issues or needs and determine your best solution. You can also click here to book a free consultation.
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