2025 Tax Update: Higher Mileage Deduction for Business Travel Announced

The IRS has announced a 3-cent increase in the standard mileage rate for business use, raising it to 70 cents per mile starting January 1, 2025. Rates for medical, moving, and charitable purposes remain unchanged at 21 cents and 14 cents per mile, respectively. This increase means businesses can deduct higher expenses for vehicle-related business travel, potentially lowering their taxable income. The adjustment reflects updated studies on vehicle operating costs and applies to all vehicle types, including hybrids and EVs. While optional, this rate offers a simplified method for tracking deductible travel costs. More details, including employer reimbursement guidelines, are outlined in IRS Notice 2025-5.

If you would like to read more, please visit:

https://www.irs.gov/newsroom/irs-increases-the-standard-mileage-rate-for-business-use-in-2025-key-rate-increases-3-cents-to-70-cents-per-mile