Mileage & Vehicle Deductions 2025 — Maximize Your Tax Savings on Business Driving
Ever feel like your business miles are burning a hole in your profits? What if every drive to a meeting or supply run was helping reduce your taxes? In 2025, the IRS increased the standard mileage rate to 70¢ per mile, making it one of the most valuable and overlooked business deductions out there.
This guide breaks down how to claim mileage the right way—standard rate vs. actual expenses—with smart recordkeeping tips to maximize your deduction and avoid IRS headaches.
What’s New in 2025 — IRS Rates You Need to Know
The IRS standard mileage rates for 2025 are:
Business: 70¢ per mile (up 3¢ from 2024)
Medical or Moving (Military only): 21¢ per mile, unchanged
Charitable: 14¢ per mile, unchanged
The 2025 business rate reflects inflation-adjusted estimates based on vehicle operating costs—fuel, insurance, depreciation, and more.
Also: The depreciation component embedded in the 70¢ rate is 33¢ per mile this year.
Rate vs. Real Costs — Choosing Your Deduction Method
Standard Mileage Rate Method
Multiply business miles driven by 70¢.
To use this method:
You must choose it the first year you use the vehicle for business if you own it.
If leased, you must stick with this method for the entire lease term.
Simple and audit-friendly—only mileage log needed, plus tolls and parking.
Actual Expense Method
Track and prorate actual expenses like fuel, maintenance, repairs, insurance, and depreciation.
Best for high-cost vehicles or heavy-use situations.
Requires detailed logs and can’t be combined with certain depreciation deductions.
Smart Move: Calculate both methods to see which delivers the bigger deduction each year.
Why This Matters
At 70¢ per mile, 1,000 miles of business travel = $700 deduction—big impact on taxable income.
For remote workers or gig entrepreneurs, mileage can become one of your most powerful write-offs.
Tracks better than blanket “travel” expenses and stands up well under scrutiny when documented correctly.
Smart Tips for Maximizing Vehicle Deductions
Keep meticulous logs: Include date, starting/ending odometer, purpose, and miles for each trip. Weekly updates work best.
Know method rules: Using actual method first disqualifies you from standard mileage rate later, but not vice versa.
Include all business travel: Client visits, supply runs, business mail—just not commuting.
Claim additional items separately: Even with standard method, deduct tolls and parking.
Use IRS Publication 463 as your reference for vehicle tax rules.
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1. What’s the 2025 business mileage rate?
70¢ per mile, up from 67¢ in 2024.2. Can I choose between standard rate and actual expenses?
Yes. If you use the standard rate first year, you can switch later. If you start with actual expenses, you cannot use the standard rate for that vehicle.3. What if I use my car for multiple purposes?
Deduct only for business mileage. Commuting isn’t deductible; track miles separately.4. Do I need a log?
Absolutely. IRS expects a timely log with details for each business trip.5. What about depreciation?
The mileage rate assumes 33¢ per mile covers depreciation for 2025—you can claim that automatically if using standard method.
Business miles shouldn’t go to waste—especially when the IRS puts 70¢ on the table. With solid logging and smart method selection, you can lower your tax bill while capturing real vehicle cost relief.
Want personalized help tracking your mileage and optimizing your vehicle deductions?
Join our 2025 Tax Season Waitlist now: tbtxsolutions.com/join
