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2025 Standard Mileage Rates

2025 Standard Mileage Rates

The Internal Revenue Service (IRS) has issued the optional 2025 standard mileage rate that is used to calculate the deductible costs of operating vehicles for business, charitable and medical purposes, as well as for active-duty members of the Armed Forces who are moving.

The optional standard mileage rate for automobiles driven for business will increase 3 cents in 2025. Beginning January 1, 2025, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

  • 70 cents per mile driven for business use (3 cent increase from 2024)
  • 21 cents per mile for medical purposes (unchanged from 2024)
  • 21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces (unchanged from 2024)
  • 14 cents per mile driven in service of charitable organizations (unchanged from 2024)

These rates also apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles. The standard mileage rate for business use is based on an annual study of fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on variable costs.

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.

Notice 2025-5 outlines the optional 2025 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed-and variable rate (FAVR) plan. Additionally, the Notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in 2025 for which employers may calculate mileage allowances using a cents-per-mile valuation rule or the fleet-average-valuation rule.

Please contact your Brown Plus advisor if you have any questions regarding the 2025 standard mileage reimbursement rates.

Posted In: Tax | Insights

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