What is the IRS Mileage Rate? 2025 Standard Mileage Deductions Explained
What is the IRS Mileage Rate?
The IRS mileage rate is a standard per-mile rate set by the Internal Revenue Service (IRS) for taxpayers to use when calculating their tax deductions for business use of personal vehicles. Self-employed individuals and businesses can use this rate to determine the deductible expenses for operating a car for business, medical, moving, or charitable purposes.
Understanding the IRS Mileage Rate
Fuel prices, vehicle maintenance costs, and insurance expenses affect the IRS mileage rate each year. To simplify expense deductions, taxpayers can use the standard mileage rate instead of tracking actual vehicle costs.
Current IRS Mileage Rate for 2025
As of January 1, 2025, the IRS standard mileage rates are:
- Business Use: 70 cents per mile
- Medical or Moving Purposes: 21 cents per mile
- Charitable Organizations: 14 cents per mile
Vehicles used for work-related or tax-deductible purposes are subject to these rates.
Who Can Use the IRS Mileage Rate?
Self-Employed Individuals & Businesses
Business-related miles can be deducted by freelancers, independent contractors, and business owners. The following activities are eligible:
- Traveling to client meetings
- Driving to job sites
- Errands related to business, such as banking or office supplies
Employees
Under the Tax Cuts and Jobs Act, unreimbursed business mileage expenses cannot be deducted until 2026. However, some employers reimburse mileage at the IRS rate.
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Medical & Moving Mileage Deductions
Taxpayers can deduct medical mileage, such as trips to hospitals and doctors’ offices. Moving-related mileage can also be claimed by active-duty military members.
Charitable Mileage Deduction
Volunteers who drive for charitable organizations can claim 14 cents per mile as a tax deduction.
How to Calculate Mileage Deductions
In order to determine your mileage deduction, follow these steps:
- Track Your Miles: Keep an accurate mileage log.
- Multiply by the Applicable IRS Mileage Rate:
- Example: In 2025, if you drive 1,000 miles for business, you can deduct:
- 1,000 miles × 70 cents = $700 deduction
- Example: In 2025, if you drive 1,000 miles for business, you can deduct:
- Claim the Deduction on Your Tax Return: Use Schedule C (for self-employed individuals) or Schedule A (for medical and charitable deductions).
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Standard Mileage Rate vs. Actual Expenses
Taxpayers can choose between:
- Standard Mileage Rate: Multiplies miles driven by the IRS rate to simplify tax filing.
- Actual Expense Method: Tracks all vehicle-related expenses, such as fuel, maintenance, depreciation, and insurance.
It is generally necessary to use a method for the lifetime of a vehicle once it is selected.
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Record-Keeping for IRS Mileage Deductions
The IRS requires detailed records to qualify for mileage deductions. Include the following in your mileage log:
- Date of the trip
- Starting and ending locations
- Purpose of the trip
- Total miles driven
In case of an IRS audit, using mileage tracking apps or a manual logbook ensures accurate records.
Maximizing Your Tax Deductions with the IRS Mileage Rate
Consider these factors to maximize your mileage tax deduction:
- Automate your mileage record-keeping with a mileage tracking app
- Avoiding IRS scrutiny by separating business and personal miles
- Maintaining accurate mileage logs to avoid discrepancies
Conclusion
Taxpayers can easily deduct vehicle-related expenses using the IRS mileage rate. It is important to understand the IRS standard mileage rate, regardless of whether you are self-employed, volunteering, or traveling for medical reasons. Track your mileage, follow IRS guidelines, and consult a tax professional if you need further assistance.
