At the end of December, the IRS announced standard mileage rates for 2025. Below are the deductions, if you are using an automobile for approved purposes:
- Self-employed and business: 70 cents/mile (up from 67 cents in 2024)
- Charities: 14 cents/mile (unchanged from 2024)
- Medical: 21 cents/mile (unchanged from 2024)
- Moving (military only): 21 cents/mile (unchanged from 2024)
It gets complicated
Before making your claim, you need to read the find print. For example, the IRS says that if you use your car only for business purposes, you may deduct its entire cost of ownership and operation (subject to various limits). However, if you use the car for both business and personal purposes, you may deduct only the cost of its business use.
The IRS explains that you can generally figure the amount of your deductible car expense by using one of two methods: the standard mileage rate method or the actual expense method. If you qualify to use both methods, you may want to figure your deduction both ways before choosing a method to see which one gives you a larger deduction.
Further details are available on the IRS site, Topic no. 510, Business use of car. You should discuss your situation with a tax professional.
Please contact us with question at 717.766.1777 or payroll@paysmartpa.com.