What’s the Difference Between the 2024 and 2025 Mileage Rates?

If you plan to claim driving-related expenses on your taxes, understanding the changes in the IRS mileage rate 2025 compared to 2024 is essential. The IRS updates the mileage rates every year to reflect shifts in fuel prices, vehicle maintenance costs, insurance premiums, and other factors that impact the real cost of driving. Even small adjustments to these rates can affect the size of your deduction—especially if you drive a lot for business or medical purposes.

As of early projections, the business mileage rate is expected to increase slightly in 2025 due to ongoing inflation, higher fuel prices, and increased costs of car ownership. The 2024 business rate was 65.5 cents per mile, and the IRS may raise the 2025 rate to around 67 cents per mile. This change might not seem drastic, but across thousands of miles, the added deduction can result in real savings.

Side-by-Side Comparison: IRS Mileage Rate 2025 vs 2024

To help you see the differences clearly, here’s a simplified comparison of the rates:

While the charitable rate is fixed by federal law and rarely changes, the other two rates fluctuate annually based on economic conditions. The medical and moving mileage rate is expected to decrease slightly in 2025 due to falling fuel prices in Q3 and Q4 of 2024.

Why the Mileage Rate Is Adjusted Each Year

The IRS adjusts the standard mileage rates to reflect the average costs of driving a vehicle in the United States. These rates account for more than just gasoline—they factor in:

• Vehicle depreciation
• Insurance premiums
• Routine maintenance
• Tire replacement
• Registration fees
• Fuel prices

If these costs increase nationally, the IRS responds by raising the standard mileage rate for the upcoming year. Conversely, if operating costs decline, the rates may drop.

These adjustments help ensure the deduction stays fair and reasonable for taxpayers using personal vehicles for qualifying purposes.

How These Changes Affect Your Deduction Potential

Even a 1.5 cent difference in the business rate can significantly affect your deduction if you log thousands of miles. For instance:

• 2024 rate: 10,000 business miles × $0.655 = $6,550 deduction
• 2025 rate: 10,000 business miles × $0.67 = $6,700 deduction

That’s an extra $150 in deductible expenses simply due to the rate change. If you’re in the 24% tax bracket, that’s about $36 more in tax savings, without changing your driving behavior.

While that might not seem huge, the benefits multiply with more miles, especially for rideshare drivers, delivery workers, and consultants constantly on the road.

Which Method Should You Use in 2025: Standard Mileage or Actual Expenses?

With the new mileage rate in place, you’ll still need to choose between using the standard mileage deduction or tracking actual vehicle expenses.

Benefits of the Standard Mileage Rate

• Quick and simple
• Requires only mileage logs
• Ideal for high-mileage, low-cost drivers
• Accepted by the IRS with fewer questions

Benefits of the Actual Expense Method

• Potentially larger deductions if your car is expensive to operate
• Useful if you lease or have a high-cost vehicle
• Allows write-offs for insurance, repairs, registration, and depreciation

If you used the actual expense method in the first year of a vehicle’s use, you may not be allowed to switch to the standard mileage rate in later years. If you’re unsure which route saves you more, run the numbers or speak with a tax advisor before filing.

What Kinds of Driving Qualify for the IRS Mileage Rate?

To benefit from the updated 2025 mileage rate, your trips must fall into IRS-defined categories:

• Business travel: Driving between job sites, visiting clients, attending meetings, delivering items, or running work-related errands.
• Medical travel: Driving to medical appointments, treatment centers, or pharmacies (if itemizing deductions).
• Moving travel: Active-duty military members relocating due to PCS orders.
• Charitable travel: Driving on behalf of a 501(c)(3) nonprofit as a volunteer.

Routine commuting from your home to a regular office does not qualify for any deduction, regardless of the mileage rate.

What You Need to Track in 2025 to Use the IRS Mileage Rate

To claim mileage deductions, especially under the updated 2025 rate, you must maintain an accurate mileage log. This includes:

• The date of each trip
• The starting and ending locations
• The purpose of the trip
• The total miles driven

You can log this information manually in a notebook or spreadsheet, but apps like MileIQ, TripLog, and Everlance offer automatic tracking that saves time and ensures IRS compliance.

Pro tip: Start tracking mileage on January 1st and do it daily to avoid errors or missed trips.

What to Expect from Mid-Year Adjustments

In some years, especially during periods of economic volatility or fuel price spikes, the IRS may issue mid-year mileage rate updates. This happened in 2022 when gas prices rose rapidly. If this happens in 2025, you’ll need to split your deduction between the two rate periods.

Example:

• 5,000 miles driven from Jan–Jun (old rate)
• 6,000 miles driven from Jul–Dec (new rate)

Each group of miles must be multiplied by the appropriate rate to calculate your total deduction.

Conclusion

The updates between the IRS mileage rate 2025 and the 2024 rate might look small, but they matter—especially for taxpayers who rely heavily on their vehicles for work. Even a small increase in the business rate can lead to larger deductions and more money saved on taxes.

By understanding the changes and keeping clean mileage records, you can maximize your deduction, remain IRS-compliant, and ensure you’re not leaving any money on the table. Start logging your miles now, review the official rate once it’s published, and apply the correct rate to every qualifying trip you make in 2025.