2025 Business Mileage: Rate Increases
- Renita Brown
- Jan 7
- 2 min read
The IRS has announced updates to the standard mileage rates for 2025, affecting deductions for business use, medical purposes, and moving expenses for active-duty military members. Here's what you need to know:
2025 Standard Mileage Rates
Business Use: 70 cents per mile, an increase of 3 cents from 2024.
Medical or Moving Purposes: 21 cents per mile, unchanged from 2024.
Charitable Purposes: 14 cents per mile, unchanged as this rate is set by statute.
Understanding the Changes
The increase in the business mileage rate reflects rising costs associated with vehicle operation, including fuel, maintenance, and depreciation. The rates for medical and moving purposes remain the same, indicating stability in the variable costs considered for these categories.
Who Is Affected?
Business Use: Self-employed individuals and businesses that use vehicles for work-related activities can benefit from the increased deduction rate.
Medical Purposes: Individuals traveling for medical care can continue to deduct travel expenses at the same rate as 2024.
Moving Expenses: Active-duty military members relocating due to a permanent change of station can deduct moving-related travel expenses at the unchanged rate.
How to Apply These Rates
Maintain Accurate Records: Keep detailed logs of miles driven, including dates, destinations, and purposes, to substantiate your deductions.
Calculate Deductions: Multiply the total miles driven by the applicable rate to determine your deductible amount.
Report on Tax Returns: As IRS guidelines permit, include these deductions on your tax filings.
Additional Considerations
Alternative Deduction Methods: Depending on which method provides a greater deduction, taxpayers may calculate actual vehicle expenses instead of using the standard mileage rates.
Limitations: Under the Tax Cuts and Jobs Act, only active-duty military members can deduct moving expenses. Additionally, the charitable mileage rate is fixed by law and remains unchanged.
For more detailed information, refer to the IRS announcement
Note: Tax laws can be complex and subject to change. It's advisable to consult with a tax professional to understand how these updates may impact your specific situation.
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