The IRS has announced that the optional standard mileage rate for automobiles driven for business will increase by 3 cents in 2025, while the mileage rates for vehicles used for other purposes will remain unchanged from 2024.
Optional standard mileage rates are used to calculate the deductible costs of operating vehicles for business, charitable and medical purposes, as well as for active-duty members of the Armed Forces who are moving.
Beginning January 1, 2025, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
- 70 cents per mile driven for business use, up 3 cents from 2024.
- 21 cents per mile driven for medical purposes, the same as in 2024.
- 21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces, unchanged from last year.
- 14 cents per mile driven in service of charitable organizations, equal to the rate in 2024.
The rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.
While the mileage rate for charitable use is set by statute, the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes, meanwhile, is based on only the variable costs from the annual study.
Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. And only taxpayers who are members of the military on active duty may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station.
Use of the standard mileage rates is optional. You may instead choose to calculate the actual costs of using your vehicle.
When using the standard mileage rate for a vehicle you own and use for business, you must choose to use the rate in the first year the automobile is available for business use. Then, in later years, you can choose to use the standard mileage rate or actual expenses.
If you use the standard mileage rate for a leased vehicle, you must employ that method for the entire lease period, including renewals.