While taxes are unavoidable, taking advantage of eligible deductions ensures you’re not leaving free money on the table. This article explains the IRS mileage rate in detail—how it works, how to use it for deductions, and how to track your expenses correctly to stay compliant.
What Is the IRS Mileage Rate?
The IRS mileage rate is essentially free money for business drivers, allowing you to reduce your taxable income for every work-related mile driven. If you use your personal vehicle for business purposes—such as client meetings, deliveries, or job site visits—you can claim a standardized deduction per mile instead of tracking individual expenses like gas, maintenance, and insurance. This per-mile deduction is the IRS mileage rate. It simplifies tax deductions by bundling all vehicle-related costs into a single, easy-to-calculate figure, helping you maximize savings without the hassle of itemizing every expense.
Show Me the Money: Current IRS Mileage Rates for 2025
In 2025, the IRS will allow you to deduct 70 cents per business mile—but only if you claim it correctly. That’s a 3-cent boost from 2024’s 67 cents per mile. This steady upward trend (from 65.5 cents in 2023) reflects rising vehicle costs and inflation, making it even more valuable for those who drive for work.
Here are some key mileage rates to keep in mind:
- Business mileage (70 cents per mile): the basic rate used by most entrepreneurs and self-employed individuals
- Charitable service mileage (14 cents per mile): used for volunteering with IRS-recognized charities
- Medical and moving mileage (21 cents per mile): restricted to only active-duty military personnel relocating to a new duty station
Why the different rates?
The business rate is higher because it accounts for all vehicle-related expenses: depreciation, maintenance, repairs, gas, insurance, and more. Meanwhile, the charitable rate has remained unchanged since 1998, as it’s set by law rather than adjusted for inflation.
Who can claim these sweet tax deductions?
I know you’re excited about claiming 70 cents per mile, but before you get ahead of yourself, remember—not everyone qualifies.
Thanks to the Tax Cuts and Jobs Act (TCJA), passed in 2017, the rules have shifted significantly.
If you’re an employee who uses your car for work, you’re out of luck. Gone are the days of writing off unreimbursed employee business expenses, with the exception of folks who are in the military.
Before you start counting your tax savings, here’s a breakdown of who actually qualifies for this deduction:
- Self-employed entrepreneurs (sole proprietors and single-member LLCs): If you run your own business, you can deduct miles driven for client meetings, supply runs, and other work-related trips.
- Independent contractors: Whether you’re a consultant, designer, or service provider, any driving you do for business purposes is deductible.
- Small business owners: If you own a business, even a side hustle, you can write off mileage for errands, deliveries, and business travel.
- Gig workers (Uber drivers, DoorDash deliverers, etc.): Every mile driven while working for a rideshare or delivery service counts as a deductible business expense.
- Freelancers of all kinds: Writers, photographers, and other freelancers can deduct miles for client meetings, research trips, and work-related errands.
Let’s be crystal clear about what counts as business mileage:
- Driving from your office to meet a client? Yes.
- Driving to the bank to make a business deposit? Yes.
- Driving from your home to your regular workplace? No; unfortunately, that’s considered a commute and doesn’t count.
- If you work from home and have a legit home office, driving from your home to meet clients or suppliers can count as business mileage from the moment you back out of your driveway.
Remember, you can’t claim 100% of your vehicle use unless you have a separate vehicle exclusively for business. If you use the same car for personal and business purposes, you’ll need to track and calculate the percentage used for business.
Two Ways to Calculate Your Mileage Deduction (Choose Wisely!)
It’s now time for the million-dollar question: how should you calculate your mileage deduction?
The IRS offers you two options, and picking the right one could mean hundreds or even thousands of dollars’ difference in your tax savings.
1. The Standard Mileage Rate Method
This is the simplest, most hassle-free way to deduct vehicle expenses, which is why most entrepreneurs swear by it.
Instead of tracking every individual car-related cost, you simply multiply your total business miles by the IRS mileage rate—70 cents per mile in 2025
Total Business Miles x IRS Mileage Rate (70 cents) = Deduction Amount
This flat rate covers gas, insurance, maintenance, depreciation, and everything else, without the need to save every receipt. So if you’re a freelance photographer who drives 8,000 miles to various photoshoots throughout the year, this is how it would look:
8,000 miles x $0.70 = $5,600 deduction
That’s $5,600 off your taxable income without any complicated expense tracking.
All you need is a reliable mileage log (e.g., a notebook or a tracking app) to ensure you’re covered if the IRS ever asks for proof.
2. The Actual Expense Method
This method requires more time and effort, but it can potentially save you more money.
Instead of using the simple per-mile rate, you track every single car-related expense you pay for the year, including:
- Gas and oil: Every fill-up counts.
- Repairs and maintenance: This includes oil changes, brake replacements, and other necessary fixes.
- Tires: If you need to repair or replace worn-out tires, it counts as a business expense.
- Insurance: Any monthly or annual vehicle policy payments should be included.
- Registration fees: Yearly renewal costs also count as a business expense.
- Loan interest or lease payments: A portion of your financing or leasing costs counts towards your deduction.
- Depreciation: If you own your car, you can deduct how much value it loses over time.
- Parking fees and tolls: These costs are deductible as business-related expenses under both methods.
Since you are most likely using your car for both work and personal matters, you need to assess what percentage of your driving is for business. Take this example:
- You spent $8,000 on car expenses this year.
- 60% of your driving was for business.
Your calculation would then be:
$8,000 x 60% = $4,800 deduction
Which method should you use?
Due to its convenience, the standard mileage method should be your go-to, especially if:
- You drive a fuel-efficient car: The IRS rate (70 cents per mile) assumes average fuel and maintenance costs. If your car is cheap to run, you could come out ahead with this method.
- You put a lot of miles on your car for business: The more miles you drive, the higher your deduction, making this method especially rewarding for frequent drivers.
- You don’t want to track every little expense: Since the IRS rate covers gas, maintenance, and depreciation, all you need to track is mileage, saving you time and effort.
Tax Filing: How to Claim Your Mileage Deduction
You’ve tracked your miles like a pro all year. Now let’s turn those miles into actual tax savings when filing time rolls around.
Here’s how you claim your mileage deduction depending on your business structure:
Sole proprietors and single-member LLCs
If you’re a sole proprietor or have a single-member LLC:
- Report your mileage deduction on Schedule C of your Form 1040.
- If you’re using the standard mileage rate, enter your business miles and the calculation on Part IV of Schedule C.
- If using actual expenses, list your total vehicle expenses as “Car and Truck Expenses” on Line 9.
Partnerships
If you own a joint partnership business:
- Report your mileage deduction on form 1065.
- Partners can deduct unreimbursed vehicle expenses related to business use on Schedule E of their Form 1040—one of the few remaining unreimbursed business expense deductions available.
If you have an S- or C-Corporation
If you have either an S-Corporation (S-Corp) or C-Corporation (C-Corp), filing your mileage deduction can be trickier:
- The business should report vehicle expenses on Form 1120 (C-Corp) or Form 1120S (S-Corp).
- If the corporation reimburses you for business use of your personal vehicle, the reimbursement may be tax-free if it follows accountable plan rules. This means you must provide proper documentation (like mileage logs), and the company must only reimburse actual business-related costs. Otherwise, the reimbursement could be treated as taxable income.
If you’re using tax software
Filing your mileage deduction with tax software is straightforward, as most programs guide you step by step.
- The software will ask key questions, such as:
- Do you want to use the standard mileage rate or actual expenses method?
- How many miles did you drive for business?
- Once you input the necessary details, the software will automatically calculate your deduction, ensuring you claim the maximum amount without manual calculations.
If you’re working with a tax professional
If you work with a tax professional, they will guide you through the process and provide a list of necessary documents to prepare, including the following
- Your annual mileage log and total miles driven for the year.
- If you’re using the actual expenses method, you’ll need to provide all vehicle-related receipts (gas, maintenance, insurance, etc.).
Staying organized throughout the year not only reduces preparation fees but also ensures that you maximize your deductions and include all eligible expenses. To simplify the process, use a digital mileage tracking app to automatically log your trips and maintain accurate records over time. While your mileage log isn’t submitted with your tax return, it’s crucial to keep it ready in case of an IRS audit.
Don’t leave money on the table—stay diligent with your tracking and optimize your IRS mileage rate to get the deduction you’re entitled to.
