New IRS Mileage Rates for 2025: What Business Owners Need to Know
For many small business owners, vehicle use is a regular part of daily operations; whether it’s meeting clients, making deliveries, or traveling to job sites. And while gas prices may rise and fall, one thing that can consistently put money back in your pocket is the IRS standard mileage deduction.
Each year, the IRS updates the mileage rates used to calculate deductible travel costs. For 2025, these new rates went into effect on January 1, and knowing them now ensures you get every tax break you’re entitled to without running into compliance issues later.
At Genovations Accounting, we help business owners track and claim mileage deductions the right way, so you keep more of your hard-earned money and stay in the IRS’s good graces.
When Mileage Tracking Applies and When It Doesn’t
One of the most common questions we get from clients is: “Do I need to track my mileage?”
Here’s the quick answer:
Yes → If you use your personal vehicle for business purposes and want to claim the standard mileage deduction.
No → If the vehicle is owned or leased by the business and all operating costs (fuel, insurance, repairs, etc.) are reported directly under the business. In that case, you typically use the actual expense method, and mileage deductions don’t apply.
Knowing the difference ensures you don’t waste time tracking miles you can’t deduct—or miss out on deductions you could have claimed.
2025 Standard Mileage Rates
Starting January 1, 2025, the IRS rates are:
Business use: 70 cents per mile
Medical travel: 21 cents per mile
Charitable service: 14 cents per mile (unchanged from 2024)
Moving (Military Only): 21 cents per mile
Every qualifying mile you drive for business purposes adds up—so a few short trips a week can turn into hundreds or even thousands in deductions by year’s end.
How to Track Miles the Right Way
The IRS is very clear: no log, no deduction. To make sure you’re audit-proof:
Record each trip’s date, destination, purpose, and mileage.
Use a trusted tracking tool like MileIQ, Everlance, or QuickBooks Time.
Maintain logs year-round, not just during tax season.
Even short, recurring trips (like a weekly client visit) should be recorded—because they add up.
Common Mileage Mistakes to Avoid
Many taxpayers lose deductions—or trigger IRS scrutiny—because of these pitfalls:
Estimating mileage instead of tracking daily.
Mixing personal and business miles in one total.
Forgetting to log short trips.
Using rounded numbers like “10,000 miles exactly.”
Switching between the standard rate and actual expense method incorrectly.
IRS Red Flags to Watch For
The IRS looks closely at mileage claims that seem unusually high or inconsistent. Red flags include:
Excessive mileage with no supporting log.
Inconsistent mileage reporting from year to year.
Claiming mileage and full vehicle expenses in the same year.
Failing to produce documentation during an audit.
The Genovations Approach to Mileage Deductions
When you work with Genovations Accounting, we make the process simple, accurate, and IRS-ready:
We help you choose the right method: standard mileage or actual expenses.
We review your logs to catch mistakes before the IRS does.
We integrate mileage tracking apps directly with your bookkeeping.
We ensure your deductions are maximized without crossing compliance lines.
Did You Know?
Even moderate mileage, just 100 business miles a week, can mean over $3,600 in deductions for 2025. That’s real money back in your business budget.
Maximize Every Mile You Drive
Mileage deductions are too valuable to overlook and too risky to guess at. With proper tracking and guidance, you can turn everyday business travel into significant tax savings.
Book your Vehicle Deduction Review Session today
Book a free 30-minute Consultation with Genovations Accounting
