Standard Mileage Rates for Business Use in 2025

The IRS recently announced the optional standard mileage rate for automobiles driven for business has increased to 70 cents per mile starting January 1, 2025. The 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
• 21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces
• 14 cents per mile driven in service of charitable organizations

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.

Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle.

Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the first year the automobile is available for business use. Then, in later years, they can choose to use the standard mileage rate or actual expenses.

For a leased vehicle, taxpayers using the standard mileage rate must employ this method for the entire lease period, including renewals.

For further information regarding these changes, visit the IRS website.