By Keiter CPAs
Standard mileage rate increase coming for business use of qualified automobiles
On December 19, 2024, the IRS increased the standard mileage rate for the business use of an automobile to 70 cents per mile for 2025, (Notice 2025-5).
| Year | Mileage Rate |
|---|---|
| 2025 | 70 cents per mile |
| 2024 | 67 cents per mile |
| This rate applies to business use of the following vehicles: |
|---|
| · Vans |
| · Pickups |
| · Panel trucks |
| · Fully electric vehicles |
| · Hybrid vehicles |
| · Gasoline-powered vehicles |
| · Diesel-powered vehicles |
Employers can use this rate to reimburse employees for the business use of their vehicles. Self-employed individuals can use this rate to claim their business mileage deduction. Since the TCJA in 2017, employees are no longer able to claim a miscellaneous itemized deduction for unreimbursed business expenses, including the use of their own automobile.
Other mileage rates remain unchanged for 2025
The standard mileage rates for medical purposes (21 cents per mile), military moving purposes (21 cents per mile), and charitable purposes (14 cents per mile) remained unchanged for 2025.
Taxpayer mileage rate considerations
The use of the standard mileage rates is optional. Taxpayers may choose to calculate the actual cost of using the vehicle in computing the business deduction for the use of an automobile. With section 179 and bonus depreciation amounts for a business vehicle, in the first year of operation, the actual expense method will most likely produce a larger deduction.
Taxpayers using the standard mileage rate for the business use of a vehicle they own must choose to use the standard mileage rate in the first year that the vehicle is available for business use. In later years, they can choose the standard mileage rate or actual expenses.
For a leased vehicle, the standard mileage rate must be used for the entire lease period, including renewals.
The Keiter Tax team is closely monitoring these and other changing regulations that may impact you and your business. We will keep you updated so you can plan accordingly. Contact your Keiter Opportunity Advisor with questions specific to your unique situation.
About the Author
Keiter CPAs
Keiter CPAs is a certified public accounting firm serving the audit, tax, accounting and consulting needs of businesses and their owners located in Richmond and across Virginia. We focus on serving emerging growth businesses and companies in the financial services, construction, real estate, manufacturing, retail & distribution industries and nonprofits. We also provide business valuations and forensic accounting services, family office services, and inbound international services.
More Insights from Keiter CPAsThe information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.
