The IRS issued an increase in the standard mileage rates for business travel, effective January 1, 2025. While the IRS states that standard mileage rates can be applied to the use of a car, van, pickup or panel truck used for business purposes, it’s important to note the correct application of the deduction.
The IRS 2025 Mileage Rates for Using a Vehicle for Business Purposes are:
- 70 cents per mile for each business mile (an increase of 3 cents per mile from 2024)
- 21 cents per mile for medical purposes (unchanged from 2024)
- 21 cents per mile to cover moving or medical purposes for qualified active-duty members of the Armed Forces (unchanged from 2024)
- 14 cents per mile driven for charitable organizations (unchanged from 2024)
Depreciation allowances
The portion of the business standard mileage rate treated as depreciation is 26 cents per mile for 2021 and 2022, 28 cents per mile for 2023, 30 cents per mile for 2024, and 33 cents per mile for 2025.
When computing the allowance under a Fixed and Variable Rate (FAVR) plan, the standard vehicle cost cannot exceed $61,200 for autos, trucks, or vans (note: this is a decrease from 2024). The same value is used for purposes of the fleet-average and vehicle cents-per-mile valuation rules.
Other noteworthy guidelines issued by the IRS:
- Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses.
- Taxpayers also cannot claim a deduction for moving expenses (except Armed Forces members on active duty).
- Taxpayers can use the standard mileage rate but generally must use it in the first year the car is used for business purposes. They can choose to use either standard mileage rate or actual expense in later years.
- For a leased vehicle, taxpayers using the standard mileage rate must employ that method for the entire lease period, including renewals.
For details and situations where you cannot use the standard mileage rate, visit: IRS Standard Mileage Rates.
Contact a Pinion tax advisor with questions about this deduction and its applicability.
