The mileage rate for 2025 is one of the most important numbers for taxpayers, businesses, and self-employed professionals who use their personal vehicle for work-related travel. For tax year 2025, the IRS has set the standard mileage rates at 70¢ per mile for business, 21¢ per mile for medical and moving (for active-duty military only), and 14¢ per mile for charitable service. These rates are effective January 1, 2025, and apply to all types of vehicles, including gas, hybrid, and electric cars.
What Is the IRS Standard Mileage Rate?
The IRS standard mileage rate is a cents-per-mile allowance that lets you deduct vehicle expenses without tracking every single cost. Instead of adding up gas, insurance, repairs, and depreciation separately, you multiply the number of qualifying miles by the applicable IRS rate.
2025 IRS Mileage Rates
- 70¢ per mile for business travel
- 21¢ per mile for medical purposes
- 21¢ per mile for moving (only active-duty military)
- 14¢ per mile for charitable purposes
Why the Rates Differ
- Business miles include both fixed costs (insurance, registration, depreciation) and variable costs (fuel, maintenance).
- Medical and moving miles only account for variable costs such as fuel and maintenance.
- Charitable miles are set by federal statute and remain fixed year after year, regardless of inflation.
Who Can Use the 2025 Mileage Rates?
Not everyone can use all four rates. Each category applies to specific taxpayers and situations.
Self-Employed and Business Owners
Self-employed individuals, freelancers, and small business owners often rely on the business rate. This applies to ordinary and necessary travel for business purposes, such as:
- Driving to meet clients
- Traveling to job sites
- Picking up supplies or equipment
- Attending professional events
Employees
Most employees cannot deduct unreimbursed mileage through 2025, due to changes in tax law. However, employers can reimburse employees for qualifying business travel. When they do so under an accountable plan, the reimbursement is not taxable income for the employee.
Active-Duty Military
If you are an active-duty member of the Armed Forces relocating under official orders, you can claim the 21¢ moving mileage deduction.
Charitable Volunteers
Anyone driving in service to an approved charitable organization may deduct 14¢ per mile. This includes trips such as delivering food for a food bank, driving volunteers to events, or transporting supplies.
Standard Mileage vs. Actual Expense Method
Taxpayers can choose between the standard mileage method and the actual expense method. Both options have advantages depending on your situation.
Standard Mileage Method
This method is simple and works best when:
- You drive average miles and want less paperwork.
- You prefer not to keep detailed receipts for every vehicle expense.
- You want an easy way to calculate reimbursement for employees.
Actual Expense Method
This method allows you to deduct a portion of actual vehicle costs, such as:
- Fuel and oil
- Repairs and maintenance
- Insurance premiums
- Lease payments or loan interest
- Depreciation
It works best when:
- Your vehicle has high operating costs.
- You use your vehicle for business a majority of the time.
- You already keep detailed financial records.
What Counts as Business Mileage?
Understanding what qualifies as business mileage is critical. Business miles typically include:
- Travel between multiple job sites
- Driving to meet with clients or customers
- Trips to pick up supplies, tools, or business-related materials
- Travel to professional seminars or conferences
However, commuting from your home to your regular workplace does not count. The only exception is if you have a qualified home office; in that case, trips from your home office to another work site may qualify as business miles.
Recordkeeping: How to Track 2025 Miles Correctly
Accurate recordkeeping is the foundation of any mileage deduction. To ensure your deductions are valid, keep a mileage log that includes:
- Date of each trip
- Purpose (business, medical, charitable, moving)
- Start and end points (addresses or clear locations)
- Odometer readings at the start and end of each trip
- Total miles driven per trip
In addition, keep receipts for expenses such as parking fees and tolls, since these can be deducted separately when related to business use.
Tips for Easier Tracking
- Use a mileage tracking app to automatically log trips.
- Update logs weekly to avoid missed entries.
- Separate personal and business use clearly to avoid confusion later.
Employer Reimbursements: How It Works in 2025
Employers often reimburse employees for business travel at the IRS standard rate. Here’s what you should know:
- Reimbursement at or below 70¢/mile under an accountable plan is generally not taxable.
- Reimbursement above the IRS rate may create taxable income for the excess.
- Employees must provide timely and accurate mileage logs to qualify.
Employers benefit by using the IRS rate, since it provides a fair and consistent benchmark that avoids tax complications.
2025 Mileage Deduction Examples
Example 1: Self-Employed Consultant
- 10,000 miles driven for business in 2025
- Deduction = 10,000 × 70¢ = $7,000
- Plus $500 in parking and tolls = $7,500 total deduction
Example 2: Employer Reimbursement
- Employee drives 5,000 business miles
- Employer reimburses at 70¢/mile = $3,500 reimbursement
- This is non-taxable to the employee under an accountable plan
Example 3: Charitable Volunteer
- 1,200 miles driven for a nonprofit organization
- Deduction = 1,200 × 14¢ = $168 charitable deduction
Common Questions About the 2025 Mileage Rate
Does the 2025 mileage rate apply to electric vehicles?
Yes. The rates apply to electric, hybrid, gas, and diesel vehicles.
When do the 2025 rates take effect?
They apply to miles driven on or after January 1, 2025.
Can employees deduct unreimbursed job mileage?
No, not through 2025. The deduction is suspended under current tax law. The best option is employer reimbursement.
Can the IRS change the rate mid-year?
It’s rare, but possible if fuel costs change dramatically. In the past, the IRS has issued mid-year adjustments.
Final Thoughts on the 2025 Mileage Rate
The mileage rate for 2025 is a practical way for individuals and businesses to calculate vehicle expenses for tax deductions or reimbursements. With the business rate set at 70¢ per mile, medical and moving at 21¢, and charitable at 14¢, these figures will guide how much you can deduct or reimburse fairly throughout the year.
The key to maximizing benefits is accurate recordkeeping and choosing the method that best matches your driving habits. Whether you’re self-employed, an employer managing reimbursements, or a volunteer supporting charitable organizations, knowing the 2025 mileage rate ensures you don’t miss out on valuable savings
