2025 Mileage Rates Updated

The Internal Revenue Service has updated the optional standard mileage rates for vehicle use in various capacities for 2025. Starting January 1, the business mileage rate will rise by 3 cents to 70 cents per mile. Rates for medical and moving purposes for eligible active-duty military members will remain at 21 cents per mile, consistent with 2024 levels. The rate for charitable activities will also hold steady at 14 cents per mile.

These standard mileage rates are applicable for the use of cars, vans, pickups, and panel trucks, and include vehicles that are fully electric and hybrids, in addition to those powered by gasoline and diesel.

The business mileage rate is derived from an annual analysis of the fixed and variable costs of operating a vehicle. Conversely, the rates for medical and moving purposes reflect only the variable costs, as determined by the same study. The charitable rate is fixed by statute.

Following the Tax Cuts and Jobs Act, miscellaneous itemized deductions for unreimbursed employee travel expenses are disallowed. However, active-duty military personnel can still deduct moving expenses if they are relocating under permanent orders.

Taxpayers have the option to use these standard mileage rates or calculate the actual costs of using their vehicle for deduction purposes. For a vehicle owned and used for business, the standard mileage rate must be applied in the first year of business use to qualify for its use in subsequent years. For leased vehicles, the standard mileage rate must be used for the entire duration of the lease, including any renewals.

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