The IRS offers mileage reimbursement for business, charitable, moving, or medical uses. Taxpayers can deduct the money for each mile they drive based on the annual mileage rates for the above-mentioned purposes. The agency adjusts the rates every year to ensure it covers the use costs of the cars.
The IRS mileage rates vary depending on the use of the car or whether the taxpayer is using the business car or their own vehicle. Many businesses, self-employed people, and employees use the IRS mileage deduction to get financial relief for transportation costs.
The IRS has updated the 2025 Mileage rate in December 2024, which was in effect from 01 January 2025. Individuals or businesses in the US should know the mileage rates to compute the deduction and depreciation portion in the mileage rate when the vehicle value decreases over time.
| Business and Self-Employed Mileage Rates | 70 cent |
| Medical Mileage Rates | 21 cent |
| Charities Mileage rates | 14 cent |
| Moving mileage rates (military only) | 21 cent |
| Effective from | 01 January 2025 |
| Who qualifies? | Business trips, medical transportation, charity, and moving trip (military only) |
| Depreciation | 33 cents per mile |
| How to claim? | Through the tax form with the respective form as per your purpose |
| Official Website | https://www.irs.gov/tax-professionals/standard-mileage-rates |
Mileage Rates 2025
The Internal Revenue Service offers the following standard mileage rates for travel expenses or transportation in 2025, based on the count per mile:
| Use | Mileage Rates |
| Businesses and self-employed | 70 cents for each mile |
| Medical | 21 cents for each mile |
| Charities | 14 cents for each mile |
| Moving (military moving expenses only) | 21 cents for each mile |
The taxpayers deducting the mileage for the business travel can identify their mileage reimbursement based on their trip in the following way:
- If the employee travels with a state vehicle or in their own vehicle (when no state vehicle is available), the applied mileage rate will be 70 cents for each mile they travel.
- When the employee travels in their vehicle despite the availability of a state vehicle, the mileage reimbursement rate will decrease by 7 cents, that is, 63 cents for each mile they travel.
Who qualifies?
The IRS allows mileage reimbursement for business, moving, medical, or charitable use; the US people can check the conditions to qualify for the standard mileage rate below:
- Employees or self-employed individuals can deduct the business-related commute expenses through the IRS mileage deduction. The travel tips qualify for the mileage deduction are trips between the main workplace and to a secondary location, or the workplace to a meeting with a client, but now the commute from the employee’s residence to the business location.
- A business that offers mileage reimbursement to its employees can claim the mileage reimbursement.
- You must lease or own the car and fulfill the following requirements in order to use the IRS mileage reimbursement:
- In the fleet operation, you are prohibited from operating five or more vehicles simultaneously,
- You should know how to deduct the vehicle’s depreciation portion utilizing any method, but not the straight-line method.
- You are prohibited from deducting the car’s special depreciation allowance and and you should not claim Section 179 on the vehicle.
- Also, you must not claim actual expenses for a vehicle you rent after 1997.
- You can reimburse the mileage for medical transportation related to medical care, like ambulance, plane fares, taxi, etc.
- You can reimburse for the charity transportation for non-profit organizations.
- The military or armed forces member can deduct the moving expenses in their tax return via mileage reimbursement when they move to a new place on military orders.
Depreciation Rate
The IRS mileage reimbursement for business purposes also includes the cost of recovery for the vehicle when the value of the vehicle gradually decreases. The employees, when they use the vehicle for business-related work, can deduct the portion of depreciation as well.
For automobiles, the taxpayers can deduct the portion of depreciation for business purposes based on the rates of 33 cents per mile from January 2025. The taxpayers should also know that to determine the allowance under the FAVR plan, the automobile cost should not be above $61,200.
How to keep track of mileage?
The people who wish to use the IRS mileage reimbursement should keep track of their mileage records. For that, you must keep a record of the following things:
- Your destination
- Total miles traveled in each trip
- Time of your trip
- Date of trip
- Purpose of your trip
- Annual mileage
The individuals or businesses can keep track of their mileage records to deduct expenses later on their tax returns through the following:
- Cancelled checks
- Receipts
- Income records
- Petrol slips
- Keep your odometer record
- Note down the miles whenever you go on a business trip
- Keep the yearly odometer reading.
- You can use a mile tracker app or keep a log for each business trip.
How to claim?
Those who use the normal mileage rate must maintain a mileage record in order to be eligible for mileage reimbursement. The self-employed vehicle expenses can be deducted from the Schedule F (Form 1040) if you are a farmer, whereas for a business, Schedule C will be used.
The armed forces who claim the mileage rate for moving purposes can fill out the Form 2106 to know their deductions. If you are a volunteer and planning to deduct mileage for a charitable purpose, you can use Schedule A, whereas employees need to follow the employee reporting process.
The individuals and businesses can follow the steps below to claim the IRS mileage reimbursement:
- You need to keep track of your mileage using a mileage journal or another method.
- Next, choose your deduction method based on the purpose of the trip.
- Next, complete the tax return with the form mentioned above for each type of trip.
- Next, submit the documents related to your trip and mileage record, and file your taxes through your suited method.
IRS allows taxpayers to deduct the business, medical, charity, or moving purpose trip mileage expenses every year; the 2025 mileage rate is increased, offering more than before.