The IRS has raised the standard mileage rate to 70 cents per mile for 2025, an increase from 67 cents in 2024. This update affects small businesses across the United States, especially those that rely on vehicles for work-related travel. Understanding how this change impacts deductions and reimbursements is essential for staying compliant and making the most of available tax benefits.
Whether you manage your own books or work with professional accounting services in the US, being informed about current mileage rates can help improve accuracy and maximize deductions.
If you or your employees use personal vehicles for business purposes, the new rate allows you to deduct 70 cents for every business mile driven. This includes trips to client meetings, job sites, or vendor locations.
Important: Commuting to and from your regular workplace is not deductible.
To claim the standard mileage deduction, you must maintain a detailed log of each business trip. That includes:
Choosing between the standard mileage rate and the actual expense method is also necessary—you can’t use both for the same vehicle in the same year.
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While the business rate has increased, other mileage rates remain unchanged:
These may be relevant depending on your organization’s activities.
Many small businesses base employee mileage reimbursements on the IRS rate. If your business follows this practice, it’s important to update your reimbursement policies to reflect the 70 cents per mile rate in 2025.
Tracking vehicle use properly ensures:
Working with accounting services that understand mileage tracking and IRS requirements can simplify this process and help small businesses stay organized year-round.
The IRS standard mileage rate for 2025 is 70 cents per mile, giving US small businesses a greater opportunity to deduct vehicle use for work-related activities. Accurate logging, understanding IRS rules, and adjusting your reimbursement policies are key steps in taking advantage of this update. For small business owners focused on compliance and cost efficiency, keeping up with these tax-related changes is essential.
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