2025 IRS Mileage Rate: Complete Guide ($0.70/Mile)
Great news for self-employed workers: The IRS has increased the standard mileage rate to $0.70 per mile for business use of your vehicle in 2025, up from $0.67 in 2024. This is one of the highest rates in IRS history, making proper mileage tracking more valuable than ever.
What Is the Standard Mileage Rate?
The standard mileage rate is the amount you can deduct per mile driven for business purposes. Instead of tracking actual car expenses (gas, maintenance, insurance, depreciation), you simply multiply your business miles by the IRS rate.
- Business: $0.70 per mile (up 3¢ from 2024)
- Medical/Moving: $0.21 per mile (for active-duty military)
- Charitable: $0.14 per mile (set by statute, rarely changes)
How Much Can You Save?
Let's break down the actual dollar savings for different types of workers:
Rideshare Drivers (Uber/Lyft)
- Average miles: 15,000/year
- Deduction: 15,000 × $0.70 = $10,500
- Tax savings (25% bracket): $2,625
Delivery Drivers (DoorDash/Instacart)
- Average miles: 12,000/year
- Deduction: 12,000 × $0.70 = $8,400
- Tax savings (25% bracket): $2,100
Real Estate Agents
- Average miles: 8,000/year
- Deduction: 8,000 × $0.70 = $5,600
- Tax savings (25% bracket): $1,400
Freelancers/Contractors (Client Visits)
- Average miles: 5,000/year
- Deduction: 5,000 × $0.70 = $3,500
- Tax savings (25% bracket): $875
Who Qualifies for the Standard Mileage Rate?
You can use the standard mileage rate if you:
- ✅ Are self-employed (1099 contractor, sole proprietor, LLC)
- ✅ Own or lease the vehicle you're deducting
- ✅ Did NOT claim depreciation using certain methods (MACRS)
- ✅ Did NOT use the vehicle for hire (taxis are excluded)
- ✅ Do NOT operate 5+ vehicles simultaneously (fleet rule)
What Counts as "Business Miles"?
Business miles include driving:
- From your home to a client/customer (if home is your primary office)
- Between job sites or client meetings
- To pick up supplies/materials for your business
- For Uber/Lyft/delivery trips (while "on the clock")
NOT business miles:
- ❌ Commuting from home to a regular workplace
- ❌ Personal errands (groceries, gym, visiting friends)
- ❌ Uber/Lyft with the app off (driving home after a shift)
How to Calculate Your Deduction
The formula is simple:
Example: You're an Uber driver. In 2025, you drove:
- 15,230 miles with the Uber app on (business)
- 5,100 miles personal (commuting, errands)
- Total odometer: 20,330 miles
Your deduction: 15,230 × $0.70 = $10,661
How to Track Your Mileage Properly
The IRS requires "adequate records" for mileage deductions. You must track:
- Date of each trip
- Starting and ending locations (or just destination/area)
- Miles driven
- Business purpose (e.g., "Client meeting," "Uber shift," "Delivery run")
Standard Mileage vs. Actual Expenses: Which Is Better?
Use Standard Mileage Rate If:
- You have a fuel-efficient car (hybrid, small sedan)
- You drive HIGH mileage (15,000+ miles/year)
- You want simple record-keeping (just track miles, not receipts)
Use Actual Expenses If:
- You drive a gas-guzzler or luxury vehicle
- You have HIGH car expenses (expensive repairs, insurance)
- You drive LOW mileage but have significant costs
Example comparison: You drove 10,000 business miles in 2025.
- Standard Mileage: 10,000 × $0.70 = $7,000
- Actual Expenses: Gas ($2,500) + Insurance ($1,800) + Maintenance ($900) + Depreciation ($3,200) = $8,400 × 50% business use = $4,200
In this case, standard mileage wins ($7,000 vs $4,200).
Common Mistakes to Avoid
1. Claiming 100% Business Use
The IRS will question how you never drive your car personally. Be realistic: most drivers are 60-80% business use.
2. Round Numbers
Claiming exactly "15,000 miles" or "10,000 miles" looks suspicious. Precise tracking (e.g., 14,873 miles) shows you kept real records.
3. No Supporting Documentation
If you're audited, "I drove a lot for work" won't cut it. You need a mileage log with dates, destinations, and purposes.
4. Mixing Personal and Business Trips
If you stop for groceries during a business trip, you can't claim those personal miles. Only the business portion counts.
When Does the 2025 Rate Apply?
The $0.70 rate applies to miles driven from January 1, 2025, through December 31, 2025. If you drove business miles in 2024, you must use the 2024 rate ($0.67) for those trips on your 2024 tax return.
How MileageSnaps Helps You Maximize Deductions
Our photo-based tracking system ensures you capture every deductible mile:
- 📸 Take 2 photos per shift: Start and end odometer readings
- 🤖 OCR reads numbers automatically: No manual entry
- 📊 Instant deduction calculation: See your savings in real-time ($0.70/mile)
- 📄 IRS-ready reports: Export to PDF or CSV for tax filing
- 🔒 Audit-proof evidence: Timestamped photos show exactly when and how far you drove
Frequently Asked Questions
Can I deduct miles driven to my regular job?
No. Commuting from home to a W-2 job isn't deductible. But if you're self-employed and work from home, trips to clients ARE deductible.
What if I forgot to track miles all year?
You can reconstruct your mileage log using calendar entries, bank statements, or GPS history. But the IRS prefers contemporaneous records (created at the time), so start tracking TODAY for 2025.
Do I need receipts for the standard mileage rate?
No! That's the beauty of the standard rate. You don't need gas receipts or maintenance invoices - just your mileage log.
Can I switch from actual expenses to standard mileage?
Only if you used the standard rate in the first year you drove the vehicle for business. If you started with actual expenses, you're locked in.
Start Tracking Your 2025 Deductions Now
With the mileage rate at $0.70, every mile you don't track is money left on the table. Download MileageSnaps and start building your audit-proof mileage log today.
Disclaimer: This article is for informational purposes only and not tax advice. Consult a qualified CPA or tax professional for guidance on your specific situation. Tax laws change - verify current rates at IRS.gov before filing.