Current IRS Mileage Rates (2024 & 2025): Your Guide to Maximizing Deductions

Last updated: March 19, 2025

Let's talk about mileage rates. Not the most exciting topic, I know. But here's the truth: understanding these numbers could put thousands of dollars back in your pocket. The IRS doesn't send you a friendly reminder about deductions you might have missed. That's on you. And that's why we're here.

The 2025 IRS Standard Mileage Rates: What You Need to Know

The IRS has set the following standard mileage rates for 2025:

Important tax note: use 2024 rates for your 2024 taxes

That 3-cent jump for business miles? It's the government's way of acknowledging that yes, everything costs more these days. But it's also your opportunity to claim more on every mile you drive.

Who Should Care About These Numbers?

If You're an Employee

Your company should be reimbursing you when you use your personal vehicle for work. Many employers use the IRS rate as their benchmark. But remember:

• Your employer decides the rate (and they can lowball you if they want)

• Any reimbursement over the IRS rate gets taxed as income

• You need solid records or you're just leaving money on the table

If You're Self-Employed

This is where the real money is. Every business mile is a direct deduction on your Schedule C. At 70 cents a mile, the math gets interesting fast:

• Drive 10,000 business miles? That's a $7,000 deduction

• Drive 20,000 business miles? $14,000 off your taxable income

But you've got to track it all. The IRS isn't going to take your word for it.

If You Own a Business

You're playing both sides of the field here. Set fair reimbursement policies for your team while keeping your costs under control. The IRS rate gives you a defensible benchmark.

Standard Rate vs. Actual Expenses: Choose Your Weapon

The IRS gives you two ways to calculate vehicle expenses:

Standard Mileage Rate

Actual Expenses Method

Here's the strategy tip they don't advertise: If you start with the standard rate, you can switch to actual expenses later. Start with actual expenses, and you're locked in for that vehicle's lifetime. Choose wisely.

The Other Mileage Rates You Should Know About

Medical Mileage (21 cents per mile)

This covers trips to doctors, pharmacies, and treatments. Remember, this deduction is subject to the 7.5% AGI threshold for medical expenses.

Moving Mileage for Armed Forces (21 cents per mile)

This one's exclusively for active-duty military moving on orders. The rest of us? Out of luck until at least 2026.

Charitable Mileage (14 cents per mile)

Volunteering has its rewards. Track those miles driving for registered charities and claim them on your taxes.

Real-World Examples: The Tax Impact of Mileage Tracking

Example 1: The Gig Worker (Rideshare Driver)

Meet James, an Uber driver in Chicago who drove 30,000 miles last year for rideshare work.

With proper tracking:

• 30,000 miles × $0.70 = $21,000 deduction

• Tax bracket: 24%

• Tax savings: $5,040

Without tracking:

• James estimates 20,000 miles without documentation

• IRS audit rejects the deduction

• Lost tax savings: $5,040

The Shoeboxed advantage: Our app automatically separates personal driving from rideshare driving, so James captures every deductible mile without lifting a finger.

Example 2: The Realtor

Sarah is a real estate agent who shows properties across three counties.

With proper tracking:

• 25,000 business miles × $0.70 = $17,500 deduction

• Tax bracket: 32%

• Tax savings: $5,600

With partial tracking:

• Only remembers to log about 15,000 miles

• Deduction: $10,500

• Tax savings: $3,360

• Money left on the table: $2,240

The Shoeboxed advantage: Sarah can tag client-specific trips, making it easy to bill mileage to specific properties or keep track of which showings led to sales.

Example 3: The Farmer

John runs a 300-acre farm and makes frequent trips to suppliers, the grain elevator, and equipment dealers.

With proper tracking:

• 18,000 business miles × $0.70 = $12,600 deduction

• Additional farm vehicle actual expenses: $8,400

• Total vehicle deductions: $21,000

• Tax bracket: 22%

• Tax savings: $4,620

Without tracking:

• Rough estimate of 10,000 miles with minimal documentation

• IRS questions the deduction during an audit

• Potential lost deductions: $5,600

• Potential lost tax savings: $1,232

The Shoeboxed advantage: John can categorize trips by purpose (supply runs, equipment maintenance, deliveries) and generate reports showing the true cost of operations for different aspects of his business.

The Recordkeeping Reality Check

Here's what the IRS wants to see if they come knocking:

1. Date of each trip

2. Where you went (start and end points)

3. Business purpose

4. Miles driven

Scribbling estimates on a napkin the night before filing? That's not going to cut it. The IRS wants contemporaneous records—documentation created at the time of the activity.

Common Mileage Mistakes That Cost You Real Money

1. Forgetting eligible trips: Those quick runs to the post office or supply store add up.

2. Weak documentation: Vague notes won't survive an audit.

3. Waiting until tax time: Try reconstructing six months of driving from memory.

4. Counting your regular commute: Nice try, but that's still personal travel.

5. Mixing business and personal: The IRS expects you to separate these.

How Shoeboxed Puts Money Back in Your Pocket

Our mileage tracking solution isn't just about compliance—it's about maximizing every deduction you're entitled to:

• Automatic tracking: The app detects when you're driving and logs the trip

• Smart categorization: Business or personal? The app learns your patterns

• Cloud storage: All your records in one place, accessible anywhere

• IRS-ready reports: Generate documentation that meets all requirements

• Receipt integration: Connect your mileage to related expenses

The Bottom Line

At 70 cents a mile, proper tracking isn't just about staying legal—it's about keeping more of what you earn. A typical self-employed person might drive 15,000 business miles a year. That's a potential $10,500 deduction. Miss half those miles due to poor tracking, and you're essentially writing a $3,675 check to the IRS (assuming a 35% tax bracket).

Don't leave your money on the table. The system is complex by design, but you don't have to navigate it alone.

Try Shoeboxed free for 30 days and start keeping more of what's rightfully yours.

This article is for informational purposes only and doesn't constitute tax advice. For specific guidance, consult with a tax professional who has your best interests at heart.