The Internal Revenue Service (IRS) Declares 2025's Standard Mileage Rates

The Internal Revenue Service (IRS) has unveiled its 2025 standard mileage rates. Effective January 1, 2025, the rates for using a car, van, pickup, or panel truck for business, medical, moving, or charitable reasons will be as follows:

70 cents per mile for business use (an increase of 3 cents compared to 2024).
21 cents per mile for medical reasons (same as in 2024).
21 cents per mile for moving purposes for eligible active duty military personnel (remains the same as in 2024).
14 cents per mile for charitable purposes (set by Congress).

You can obtain these official rates and further information in Notice 2025-5.

These rates are applicable to electric, hybrid, and traditional gasoline/diesel vehicles alike.

The disparity in rates for business and medical/moving purposes is due to the methodology used in their calculation. The business rate is determined through an annual study that accounts for fixed and variable car operation costs, including depreciation, insurance, repairs, tires, maintenance, fuel, and oil. In comparison, the rates for medical and moving purposes are solely based on variable costs.

The charitable rate's constancy is attributed to a legislative stipulation that it is not adjusted for inflation or any other factors; it has remained at 14 cents per mile since the Clinton era.

Standard mileage rates serve as a foundation for calculating tax-deductible business, moving, medical, or charitable expenses (miles driven multiplied by the appropriate rate).

Taxpayers employing the standard mileage rate for a self-owned business vehicle must commit to it from the car's initial availability for business use. In subsequent years, they can either persist with the standard rate or opt for actual expenses.

For leased vehicles, the standard mileage rate must be utilized throughout the lease duration, including renewals.

If your vehicle serves multiple purposes, keep appropriate records and separate the personal travel costs. You may utilize various rates on your tax return. To utilize the rates, simply multiply the standard rates by the number of miles traveled.

For instance, if you drive 20,000 miles in 2025, with 10,000 miles for personal use, 2,000 miles for charitable purposes, and 8,000 miles for medical purposes, your calculated deduction would be as follows:

10,000 personal miles × 0 = 02,000 charitable miles × 0.14 = $2808,000 medical miles × 0.21 = $1,680

In this scenario, your total deductible mileage-related expenses would be $1,960, in addition to any relevant charges like parking fees and tolls. This amount is reported on the appropriate lines on Schedule A. Remember that medical miles are subject to the 7.5% threshold for medical expenses.

Although many taxpayers forego charitable mileage deductions due to non-itemization, the mileage rate remains relevant for charitable organizations, serving as a benchmark for reimbursements. For businesses, this is particularly pertinent now that tax reform changes in 2017 eliminated the option to claim a miscellaneous itemized deduction for unreimbursed employee travel expenses, making reimbursement plans all the more essential.

Similarly, most taxpayers cannot claim moving expense deductions except for active duty military personnel on orders to a permanent change of station.

(These circumstances could potentially change if the Tax Cuts and Jobs Act expires.)

If the standard rates do not adequately cover your expenses, you can opt to deduct actual expenses instead, albeit at a considerable accounting effort.

Lastly, these rates correspond to the 2025 tax year, for which the 2026 return will be filed. For the 2025 return to be submitted in 2025, you will utilize the 2024 standard mileage rates.

To claim tax deductions for business-related mileage in 2025, you should use the IRS's new standard mileage rate of 70 cents per mile, as outlined in Notice 2025-5.
It's crucial to note that the IRS mileage rates for medical and moving purposes, at 21 cents per mile, remain unchanged from 2024, while the charitable rate of 14 cents per mile, set by Congress, continues to remain constant since the Clinton era.
Taxpayers can use the standard mileage rates to deduct eligible expenses from their taxable income, such as deducting 2,000 miles driven for medical reasons at 21 cents per mile, resulting in a tax deduction of $420.