The IRS recently announced a $0.03 increase for the optional standard mileage rate for business uses in 2025. The IRS also announced that there will be no change in the optional mileage rate for vehicles used for charitable purposes, medical purposes, or to assist active-duty members of the Armed Forces in moving.
Beginning January 1, 2025, the optional standard mileage rates for the use of vehicles will be as follows:- $0.70 per mile driven for business use ($0.03 increase from 2024)
- $0.21 per mile driven for medical purposes (no change from 2024)
- $0.21 per mile driven for moving purposes for qualified active-duty members of the Armed Forces (no change from 2024)
- $0.14 per mile driven in service of of charitable organizations (no change from 2024)
The differences in rates as well as the change in this year's rate are explained by the fact that business use mileage is calculated by fixed and variable costs of operating an automobile, whereas the rate for medical and moving purposes are calculated based only on the variable costs. The mileage rate for charitable organizations is set by statute and has remain unchanged for years.
For a vehicle owned by the taxpayer and being used for business purposes, the taxpayer must use the standard mileage rate in the first year that the vehicle is available for business use. In subsequent years, the taxpayer can choose between the standard mileage rate or actual expenses.
For a vehicle leased by the taxpayer, taxpayers using the standard mileage rate must apply that method for the entire lease period (including renewals of the lease).
