IRS Standard Mileage Rates for 2024 and 2025: Full Breakdown

If you use your personal car for business purposes, you’re probably eligible for a mileage deduction on your taxes. 

But you can’t just guess how many miles you’ve driven or throw random numbers into your tax return. 

The IRS sets a standard mileage rate each year, determining how much you can deduct per mile.

For 2025, the IRS has increased the standard mileage rate to 70 cents per mile — a 3-cent jump from the IRS standard mileage rates 2024, which was 67 cents per mile for business use.

But how do you calculate it? Do you qualify? Should you use the IRS standard mileage rate or the actual expense method?

doola is here to help you with the answers.

Who Qualifies for the Business Mileage Rate? 

Not every mile driven qualifies for a mileage deduction. The IRS has strict rules on what counts as business use versus personal use.

Qualifies for business mileage deduction:

• Driving to meet clients or customers

• Business-related errands (e.g., picking up supplies)

• Traveling to a different worksite (if you have multiple locations)

• Driving for business if you’re self-employed or a freelancer

• Using your car for rideshare services like Uber or Lyft

Does NOT qualify:

• Commuting from home to your regular workplace (that’s a personal expense)

• Personal errands

• Driving for entertainment or leisure

Example: If you run a small bakery and drive to a supplier 20 miles away to pick up flour, you can deduct 40 miles (round trip) at 70 cents per mile, totaling $28 in tax deductions for that trip.

How to Calculate a Mileage Deduction

Here’s how you can calculate a mileage deduction:

Step 1: Track Your Business Miles

You’ll need accurate records of every business-related mile driven. Use a mileage logbook, a spreadsheet, or an app like MileIQ or Everlance to track start and end odometer readings, date, destination, and purpose of the trip.

Step 2: Multiply by the IRS Mileage Rate

The formula is simple:

Total Business Miles × Standard Mileage Rate = Deduction

For example:

• 2024 IRS mileage rate: 67 cents per mile

• 2025 IRS mileage rate: 70 cents per mile

• You drove 5,000 business miles in 2025

💰 5,000 × $0.70 = $3,500 tax deduction

Standard Mileage Rate vs. Actual Expense Method

When deducting vehicle expenses, you have two options:

Which one should you choose?

• If you drive a lot for business but have a low-maintenance car, the standard mileage rate is easier.

• If you have high fuel and maintenance costs, the actual expense method might save you more.

Example: If your total vehicle expenses (gas, repairs, insurance) are $10,000 and you use your car for business 50% of the time, you can only deduct $5,000 with the actual expense method. 

But if you drive 10,000 business miles, the standard mileage rate deduction (10,000 × $0.70 = $7,000) would save you more.

How to Deduct Business Mileage on Your Taxes for Different Business Structures

​​The way you deduct business mileage depends on how your business is structured. Whether you’re a sole proprietor, an LLC, a corporation, or a partnership, there are specific IRS forms and rules you need to follow.

Sole Proprietors & Single-Member LLCs

If you operate as a sole proprietor or a single-member LLC, you can deduct mileage expenses on Form 1040, Schedule C as part of your business deductions. 

This is the simplest method, as you’re directly reporting your mileage expenses without additional corporate policies.

Corporations (C-Corp & S-Corp)

If you own a C corporation or an S corporation, you’ll need to report business mileage on Form 1120 (for C-corps) or Form 1120S (for S-corps).

The deduction process here is slightly more complex since corporations need to account for employee vehicle use, whether the car is owned by the corporation or the employee.

📌 If the employee owns the vehicle:

• The corporation can reimburse employees for mileage expenses based on the standard mileage rate or actual expenses.

• Before 2018, employees could deduct unreimbursed vehicle expenses from their taxes, but the Tax Cuts and Jobs Act (TCJA) eliminated this deduction.

📌 If the corporation owns the vehicle:

• The corporation can only use the actual expense method to write off vehicle costs.

• Personal use of the vehicle must be excluded from deductions unless it is considered part of an employee’s compensation package. If personal use is treated as taxable employee income, then 100% of vehicle-related business expenses can be deducted.

Partnerships

For partnerships, mileage deductions are reported on Form 1065.

• Partnerships follow the same rules as S corporations when deducting business mileage.

• However, if a partner incurs unreimbursed vehicle expenses as part of their partnership agreement, they can claim these expenses as an un-reimbursed partnership expense (UPE) on Schedule E of Form 1040.

Multi-Member LLCs

If your LLC has multiple members, you may choose to file as an S corporation or a partnership. If so, use the forms and deductions required for those business structures (Form 1120S for S-corps or Form 1065 for partnerships).

📌 Important Note:

If you reimburse employees for mileage, these expenses must be tracked separately and reported on tax filings.

Example: A freelance graphic designer using Form 1040, Schedule C can claim business mileage deductions directly on their tax return, reducing their taxable income.

IRS Mileage Rate 2024 vs. 2025: A Quick Comparison

Here’s a side-by-side comparison of business mileage rates for 2024 and 2025:

Key Takeaway: The IRS mileage rate 2024 was 67 cents, but 2025 jumps to 70 cents — so if you drive for business, 2025 tax deductions will be even higher!

Maximize Your Tax Savings With doola Bookkeeping

Tracking mileage is just one part of managing your business finances. If you want to stay tax-ready all year, that’s where doola comes in.

Here’s what we offer:

✅ Automated expense tracking — no manual logs needed!

✅ Seamless integration with business bank accounts

✅ Tax-ready reports so you never overpay the IRS

Start now! Book a demo with our experts.

Related Articles:

• LLC Expenses Cheat Sheet: Tax Write-Offs for 2025

• Tax Deductions for Starting a Business