IRS raises tax deduction mileage rate for 2025 by 3 cents

• The rate is 14 cents higher than the 2021 rate.

Context: Taxpayers use the rate to calculate the "deductible costs of operating an automobile for business and certain other purposes" instead of tracking actual costs.

• It's also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

2025 IRS mileage rate

The following IRS rates apply to electric and hybrid vehicles as well as gasoline and diesel-powered cars.

• 70 cents per mile driven for business use, up 3 cents from 2024.
• 21 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, the same as the 2024 rate.
• 14 cents per mile driven in service of charitable organizations is unchanged and is a rate set by statute, the IRS said.

Mileage tax deductions

Between the lines: The IRS said that "under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses."

• Taxpayers also have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates, the IRS said.

More from Axios:

• Google shares each state's most popular Christmas cookie
• "Don't click the link": How to avoid package delivery text scams
• Holiday drinks are on tap at Starbucks, Dunkin' and more