The 2025 IRS mileage rates, and what they are actually worth

The 2025 IRS standard mileage rate is $0.70 a mile for business driving, $0.21 a mile for medical or qualified military moving, and $0.14 a mile for driving in service of a charity. Only the business rate moved for 2025 — up 3 cents from $0.67 in 2024 — while the other two held exactly where they were the year before, for two different reasons worth understanding before you rely on either figure.

The three 2025 rates, next to 2024

These figures come directly from the IRS's own Notice 2025-5, published in December 2024 and effective for miles driven on or after January 1, 2025.

Why only the business rate moved

The business rate is not an inflation adjustment in the way a tax bracket is. Each year, the IRS commissions an independent study of the fixed and variable costs of operating a vehicle — fuel, maintenance, insurance, depreciation — and resets the business rate to match. That study is why the business rate can move by a different amount than general inflation, or even move in a different direction, in a way a bracket never does. For 2025, the underlying cost study pushed the rate up 3 cents.

The charitable rate works completely differently: it is fixed directly in the tax code at $0.14 a mile under Section 170(i), a figure Congress sets, not the IRS. It has not moved in years, which is also why it stays flat even in years when the business and medical rates move substantially. The medical and moving rate follows its own annual cost study, similar to the business rate, but it simply landed at an unchanged number for 2025.

The depreciation detail inside the business rate

Of the $0.70 business rate, $0.33 a mile counts as depreciation for 2025, up from $0.30 in 2024. This matters because that portion reduces your tax basis in the vehicle: track business miles using the standard rate year after year, and the accumulated depreciation lowers what you can claim as a loss — or increases a taxable gain — if you later sell or trade the vehicle in. It is easy to overlook, because the standard mileage method feels like one flat number, but the IRS is treating part of every mile as if you had actually claimed depreciation on the vehicle itself.

How the depreciation component has moved since 2021

Notice 2025-5 also lists the depreciation component for the four years before 2025, which shows how steadily it has climbed:

This figure matters most to anyone who has used the standard mileage rate on the same vehicle across several of these years and is now working out its adjusted basis — each year's depreciation portion, multiplied by that year's business miles, adds up to a cumulative reduction that has to be tracked year by year rather than assumed from the current rate alone.

Who can actually deduct mileage on their own return

The 2017 tax law suspended the itemized deduction for unreimbursed employee business expenses — which includes personal-vehicle mileage — for tax years 2018 through 2025. A W-2 employee who drives their own car for work and isn't reimbursed generally cannot deduct that mileage on Schedule A this year. There are narrow exceptions: Armed Forces reservists, state or local government officials paid on a fee basis, and certain performing artists can still claim it as an adjustment to income rather than an itemized deduction. Everyone else who benefits from the 2025 business rate is typically self-employed, a business owner, or being reimbursed by an employer using the IRS rate as a tax-free ceiling on what it can pay out.

How the rate works inside an employer reimbursement

For employees, the 2025 rate matters most as the ceiling on a tax-free reimbursement rather than as a personal deduction. Under an accountable plan, an employer can reimburse an employee $0.70 a mile for verified business driving without that reimbursement counting as taxable wages, as long as the employee substantiates the business purpose, date, and mileage within a reasonable time. Pay more than the federal rate per mile, and the excess is treated as additional taxable compensation subject to income and payroll tax. Pay less, or reimburse nothing at all, and the employee is simply left without a deduction to make up the difference under current law — a direct consequence of the same itemized-deduction suspension described above.

What the 2025 rates add up to for one driver

Take a self-employed contractor who logs 12,000 business miles, 500 medical miles, and 300 charitable miles over 2025:

The $8,400 business figure is a direct deduction against self-employment income. The $105 medical figure only helps if it, combined with other medical costs, clears 7.5% of adjusted gross income and the taxpayer itemizes. The $42 charitable figure is itemized as well. Three identical-looking mileage logs, three different paths onto the same return.

Standard mileage rate or actual expenses

The standard rate is an alternative to tracking actual vehicle costs — gas, insurance, repairs, depreciation — and deducting a business-use percentage of the real total. Once a vehicle is placed in service, switching between methods has restrictions, and the standard rate cannot be used for a fleet of several vehicles used simultaneously, or after certain accelerated depreciation methods have been claimed. Either way, the record-keeping requirement is the same: a contemporaneous log of the date, purpose, and miles driven for each trip. The IRS backs its 2025 rates with a maximum standard automobile cost of $61,200, used in fixed-and-variable-rate reimbursement plans rather than the plain per-mile method most individual filers rely on.

Sources

• IRS: Notice 2025-5, 2025 Standard Mileage Rates

This is general information, not tax advice. Mileage deduction eligibility depends on your filing status, employment situation, and whether you itemize. For a decision about your own return, speak to a tax professional or consult the IRS directly.