The Internal Revenue Service has announced a three-cent increase in the standard business mileage rate for 2025, bringing it to 70 cents per mile, up from 67 cents in 2024. This rate applies to all vehicle types, including electric, hybrid, gasoline, and diesel-powered automobiles.
Other mileage rates will remain unchanged for 2025:
- Medical travel stays at 21 cents per mile
- Moving expenses for active-duty military members remains at 21 cents per mile
- Charitable organization service continues at 14 cents per mile
The business mileage rate has seen significant increases since late 2021, when it was 56 cents per mile. The rate is determined through an annual study of both fixed and variable automobile operating costs, while medical and moving rates consider only variable costs. The charitable rate is set by statute.
Important tax considerations remain in effect from the Tax Cuts and Jobs Act. Taxpayers cannot claim deductions for unreimbursed employee travel expenses or moving expenses, with the exception of active-duty military members relocating under orders.
Vehicle owners can use the standard mileage rate in their first year of operation. After that, they may choose between the standard rate or tracking actual expenses. However, those with leased vehicles must stick with their initial choice of the standard mileage rate throughout the entire lease period.