What Is the IRS Mileage Rate 2025?
If you’re planning to deduct vehicle expenses on your tax return, understanding the IRS mileage rate 2025 is essential. This rate, determined annually by the Internal Revenue Service, defines how much you can deduct per mile driven for qualified purposes such as business, medical, moving, or charitable activities.
Instead of tracking actual expenses like gas, oil changes, insurance, and repairs, the IRS allows you to apply a fixed rate per mile driven. This simplifies recordkeeping and provides a consistent, IRS-approved way to calculate deductions.
For 2025, although the official rate will be released toward the end of 2024, early estimates suggest the business mileage rate may be around 67 cents per mile, reflecting inflation and rising vehicle costs. This number may change once the IRS issues its formal update, but it gives a reliable benchmark for planning your tax year.
Why the Mileage Rate Matters for Taxpayers
Mileage deductions can lead to substantial tax savings—especially for freelancers, self-employed professionals, gig workers, and small business owners. By using the IRS mileage rate instead of the actual expense method, you eliminate the need to track each individual vehicle-related cost.
Business Use
If you drive for work—visiting clients, attending meetings, delivering goods—you can multiply your business miles by the 2025 mileage rate. For instance, 10,000 miles driven at 67 cents per mile equals $6,700 in deductible expenses. This is a direct reduction of your taxable income.
Medical and Moving Use
Medical mileage is deductible if you itemize and your total medical expenses exceed 7.5% of your Adjusted Gross Income (AGI). Only certain trips qualify, such as visits to doctors, clinics, and pharmacies. For military personnel, moving mileage remains deductible under a permanent change of station.
Charitable Use
The IRS allows a fixed 14 cents per mile (unchanged for years due to being set by law) for qualified charitable driving. This includes volunteer work or nonprofit-related travel for a 501(c)(3) organization.
IRS Mileage Rate 2025 (Estimated Breakdown)
These are the projected rates for the 2025 tax year. The IRS typically releases official figures in December of the prior year.
- Business mileage: 67 cents per mile
- Medical and moving (military only): 21 cents per mile
- Charitable service: 14 cents per mile
If fuel prices rise or fall dramatically, the IRS may issue a mid-year rate adjustment, as seen in previous years. Taxpayers will then apply each rate based on the mileage driven within those periods.
Who Can Use the IRS Mileage Rate?
Self-Employed Individuals
Freelancers, independent contractors, and gig workers can claim mileage directly on Schedule C, reducing taxable income from self-employment. This includes Uber or Lyft drivers, real estate agents, consultants, and delivery personnel.
Employees
Since the 2017 Tax Cuts and Jobs Act, W-2 employees can no longer deduct unreimbursed business mileage on their federal returns. However, certain states still allow this deduction on the state level.
Military Members
Active-duty military members may claim mileage for moving expenses if the move is due to a permanent change of station. The deduction is limited to direct relocation travel and does not include personal trips.
How to Track Mileage for IRS Compliance
To legally claim the mileage deduction, the IRS requires detailed documentation. This includes:
- Date of the trip
- Starting location and destination
- Business purpose of the trip
- Total miles driven
You can use paper logs, spreadsheets, or mobile apps such as Everlance, MileIQ, TripLog, or Stride to automate the process. Apps are recommended for their ability to log trips in real time and reduce errors or missing data.
Maintain your mileage logs for at least 3 years in case of audit.
Standard Mileage vs. Actual Expenses
The IRS gives you two options: use the standard mileage rate or deduct actual vehicle expenses. You must choose one per vehicle, per year.
When to Use the Standard Mileage Rate
- You want simplicity
- Your car has low operating costs
- You drive a lot of miles
When Actual Expenses Work Better
- You have high fuel or maintenance costs
- You lease a luxury or depreciated vehicle
- You track every expense carefully
Important: If you use the actual expense method in the first year the vehicle is used for business, you may be prohibited from switching to the standard rate later.
Common Mistakes to Avoid
Many taxpayers lose out on deductions or face issues during audits because of:
- Forgetting to distinguish between personal and business mileage
- Estimating mileage totals instead of using logs
- Failing to document medical or charitable travel
- Not starting mileage tracking at the beginning of the year
To avoid these pitfalls, start a mileage log on January 1, use a tracking app, and update your records regularly.
Tips for Maximizing Your Mileage Deduction
- Use mileage tracking apps to automate logs
- Keep all related records, including receipts for tolls and parking
- Review IRS updates for mid-year rate changes
- Consult a tax professional if unsure about eligibility
- If you switch cars mid-year, track each vehicle separately
Conclusion
The IRS mileage rate 2025 is a simple yet powerful tool for reducing your tax burden. Whether you’re driving for business, charity, medical, or military purposes, applying the correct rate and keeping accurate records will ensure you get the most out of your deduction. Make sure to review the official IRS release once it’s published and start tracking from day one. The more organized you are, the more you’ll save.
