The federal mileage rate, also called the standard mileage rate, is the rate the IRS sets each year to calculate deductible driving costs for personal vehicle use. It gives individuals and businesses a straightforward way to claim mileage reimbursement for business, medical, moving, or charitable purposes.
Why use the federal mileage rate?
Using the standard rate simplifies how you track and deduct driving expenses. It:
Makes expense calculations quick and consistent
Reduces the need for detailed cost tracking
Helps lower taxable income through eligible deductions
Federal mileage rate for 2025
Purpose of Travel | Rate per Mile (2025) |
Business use | $0.70 |
Medical or moving (active-duty military) | $0.21 |
Charitable work | $0.14 |
These rates apply to cars, vans, pickups, panel trucks, hybrids, and electric vehicles.
How the IRS determines the federal mileage rate
The IRS sets the mileage rate each year based on a national study of vehicle operating costs. It factors in:
Fuel prices
Vehicle depreciation
Maintenance and repairs
Insurance and registration fees
These inputs reflect the average cost of using a personal vehicle for work or other qualified activities.
How to use the federal mileage rate on your tax return
To claim the mileage deduction, accurate record-keeping is essential. Keep a mileage log that includes:
Date of each trip
Starting point and destination
Purpose of the trip
Miles driven
When filing your taxes, multiply the total qualifying miles by the correct IRS rate. You can claim this deduction on Schedule C for business expenses or as allowed under other IRS rules.
Key takeaway
The federal mileage rate helps taxpayers calculate driving-related deductions without the hassle of tracking every vehicle cost. Following the current IRS rates and maintaining clean records ensures compliance and maximizes deductions.
FAQs
Who sets the federal mileage rate?
The IRS sets and updates the rate each year.
When does the new rate take effect?
New rates usually start on January 1 of each calendar year.
Can businesses set their own mileage rate?
Yes, companies can set different reimbursement rates, but the IRS rate determines what’s tax-deductible.
Do electric vehicles qualify for the federal mileage rate?
Yes, the IRS mileage rate applies to electric vehicles as well as gas and hybrid cars.
What if I use the actual expense method instead of the mileage rate?
You can choose to deduct actual vehicle expenses, but you can’t use both methods for the same vehicle in the same year.
