Editorial · January 23, 2025
Standard Mileage Rate: How to Claim Business Driving
The standard mileage rate for business driving in 2025 is 70 cents per mile. The IRS announced it on December 19, 2024, and it applies to miles driven from January 1, 2025. That is up 3 cents from the 67 cents set for 2024.
This guide explains what the rate covers, how to figure your deduction, what records to keep and when another method may work better. It is general information, not tax advice. Check your own facts with a tax professional.
What the 2025 rate is
The IRS sets one cents-per-mile figure each year for cars, vans, pickups and panel trucks. For 2025 the business rate is 70 cents. The rate for medical trips is 21 cents. The rate for driving in service of a charity is 14 cents. Moving trips for active-duty military are also 21 cents.
The business rate comes from a yearly study of what it costs to run a vehicle, both fixed costs and variable costs. The medical and moving rates use only the variable costs. The IRS put the details in Notice 2025-5.
Using the rate is a choice. The IRS says you may instead work out the real costs of using your vehicle.
How the cents-per-mile method works
The math is simple. Multiply your business miles by the rate. If you drove 10,000 business miles in 2025, the deduction is 10,000 times $0.70, or $7,000. At 12,000 miles it is $8,400.
The rate is meant to cover gas, oil, tires, repairs, insurance, registration and the wear on the vehicle. You do not add those costs on top. You can still add business-related parking fees and tolls to the figure. Parking at your own place of work does not count, because that is a commuting cost.
The rate is just as useful for a sole proprietor as for an owner of a small firm. An employee should know one limit. Since 2018, an employee generally cannot deduct unreimbursed car costs, whether figured by actual costs or by the standard rate. Employer reimbursement plans are a separate matter.
Which miles count
Business miles are trips made for your work. Driving to a client, a job site, a supplier or the bank for the business qualifies. Driving between two work locations on the same day qualifies too.
Commuting does not. The trip between your home and your regular place of work is a personal cost. There are exceptions. If your home is your main place of business, trips from home to another work location in the same business can count. Trips to a temporary work site outside your usual area can count as well.
If you use one vehicle for both work and personal trips, you can only deduct the business share. That is why a log matters.
The log you need to keep
The IRS says you cannot deduct amounts you guess at. Publication 463 asks for adequate records, such as an account book, diary, log, statement of expense or trip sheet. A record prepared on a computer counts as an adequate record.
A good mileage log is short. For each business trip, write the date, where you went, why you went and how many miles you drove. Also note the odometer reading at the start and the end of the year, so you can show your total miles and your business share.
Write entries on the day of the trip if you can. Notes made at the time are easier to trust than a summary built months later. Keep the log with your tax records.
When actual expenses may be better
The other method is to add up your real car costs for the year. These include gas, repairs, insurance, tires, registration, lease payments and depreciation. You then deduct the business share. You need receipts for this method, and it takes more work.
It can win when the vehicle is costly to own, when you drive few miles, or when fuel and repair bills are high. The 70-cent rate favors people who drive many miles in an efficient car. If you can qualify for both methods, Publication 463 suggests you work out the deduction both ways and compare.
There are timing rules. For a car you own, you must choose the standard rate in the first year you use it for business. After that you may switch between the two methods. For a leased car, you must use the standard rate for the whole lease, including renewals.
You also cannot use the standard rate in some cases. These include owning or leasing five or more cars used for business at the same time, such as in fleet work. They also include having claimed certain depreciation methods or a section 179 deduction on the car. Alternating cars at different times is not the same as using them at the same time.
A short checklist
- Use 70 cents per mile for business miles driven in 2025.
- Keep a log with date, place, purpose and miles for every trip.
- Add business parking and tolls on top of the rate.
- Do not count your commute.
- Compare both methods before the first year of a new car is over.