Costs
Part of IRS Mileage Rates and Logs: Methods, Business Miles and the First Year Choice
How mileage rates translate into a real deduction
Mileage rates cost: what a standard per-mile rate bundles together, what actual-expense tracking costs to prove, and how to compare the two without a figure.
A mileage rate looks like the cheap way to claim a vehicle: one number, one multiplication. It is cheap in paperwork, and it is a bundle.
In 2025 the IRS business rate is 70 cents a mile, up from 67 cents in 2024 and 65.5 cents in 2023. That figure stands in for a list of vehicle costs you then cannot claim separately. Whether it beats your real costs depends on the car, the miles, and what you can prove.
What to take away
- The 2025 business rate is 70 cents a mile, up from 67 cents in 2024 and 65.5 cents in 2023. The IRS posts the next figure each December.
- Twelve thousand business miles at 70 cents is an $8,400 deduction. The same miles at 67 cents were worth $8,040.
- A car that costs $16,000 a year to run and does 60% business miles claims $9,600 under actual expenses, which beats the rate.
- The 70 cent rate covers business miles only. Medical, moving and charitable miles use separate, lower rates.
- Both methods need the same log. A CPA or enrolled agent decides which method a vehicle may use.
What the bundle stands in for
The rate approximates what it costs to own and run a car: fuel, maintenance, tires and insurance. Registration and the wearing-out of the car itself sit inside it too. Multiply 70 cents by business miles and you have claimed all of those at once, and given up claiming any of them separately.
Some costs of a specific trip sit outside the bundle and may be claimed on their own. Parking fees and tolls on business travel are the usual two. The IRS page for your year lists the rest, and the list is not the same for every kind of cost. Read it rather than assume.
Medical and moving miles paid 21 cents in 2025, and the moving figure covers active-duty military moves. Charitable miles have paid 14 cents for years because Congress fixed that number in the tax code.
The two methods side by side
Standard rate
- 2025 figure
- 70 cents a mile, 67 cents in 2024
- What you record
- Miles, dates, destinations, purpose
- What you calculate
- Business miles multiplied by the year's figure
- Paperwork cost
- Low
- Where the risk sits
- Losing the log
- Restrictions
- Rules on which vehicles may use it and on switching later
Actual expenses
- 2025 figure
- Your total vehicle costs multiplied by the business-use share
- What you record
- Miles, dates, destinations, purpose, and every vehicle cost with its receipt
- What you calculate
- Total vehicle costs multiplied by the business-use share, with depreciation under the IRS's rules
- Paperwork cost
- High
- Where the risk sits
- Losing the log, or the receipts, or getting the share wrong
- Restrictions
- Rules on depreciation and on switching later
The last row is the one people skip. The IRS sets conditions on which method a vehicle may use and on moving between them in later years. The choice made in the first year a vehicle is used for business can constrain every year after. Ask before choosing, not after.
Standard Rate vs Actual Expenses
Standard rate
- 2025 figure
- 70 cents a mile
- What you record
- Miles, dates, purpose
- What you calculate
- Business miles x rate
- Paperwork cost
- Low
- Where risk sits
- Losing the log
- Restrictions
- Vehicle and switching rules
Actual expenses
- 2025 figure
- Costs x business-use share
- What you record
- Miles, dates, purpose, receipts
- What you calculate
- Total costs x business share
- Paperwork cost
- High
- Where risk sits
- Losing log or receipts
- Restrictions
- Depreciation and switching rules
The rate is closed to a car that claimed Section 179 or bonus depreciation, and to one you ran on actual expenses after 1997. Operating five or more cars at once brings the fleet rules. A leased car that starts on the rate stays on it for the whole lease.
The cost of the record
Both methods need the same log: the date, where you went, why it was business, and the miles. Odometer readings at the start and end of the year make the business-use share defensible, whichever method is used.
The choice is between capturing trips automatically and typing them in. Mileage apps such as MileIQ, Everlance and Stride sell a free tier and a paid one. Paid tiers typically run $5 to $10 a month, or $60 to $120 a year.
MileIQ's free tier covers 40 drives a month. Automatic capture still needs checking, because the app decides which drives look like business. Typing trips in costs nothing and fails the first busy week. A log rebuilt from a calendar in April is the most expensive version of all, because it takes hours and convinces nobody.
Actual expenses add a second record: every fuel, repair, insurance and registration cost, kept and totaled, plus whatever establishes what the car cost and when it went into service. Receipt capture is free in most bank apps. A bookkeeping subscription typically runs $15 to $30 a month.
A preparer who bills by the hour typically adds $150 to $400 to a return with a vehicle schedule and a folder of receipts to check. The tax records overview covers how long that material has to be kept.
Running the comparison with the 2025 rate
Take a car driven 20,000 miles in 2025, 12,000 of them for business. That is 60% business use. Under the standard rate, 12,000 miles at 70 cents is an $8,400 deduction. At 2024's 67 cents, the same miles were worth $8,040.
Now suppose that car cost $11,000 to run for the year, counting everything the rate bundles together. Sixty percent of that is $6,600. The rate wins by $1,800.
Change the car and the answer flips. The same 60% share of $16,000 in costs is $9,600, which beats $8,400 by $1,200. Depreciation limits on passenger cars cap the actual-expense side, so the gap is often smaller than the raw totals suggest.
Run the same arithmetic on your own numbers in an afternoon.
- Total a year of actual vehicle costs from statements.
- Take the business miles from the log and the total miles from the odometer.
- Multiply the business miles by 70 cents, the 2025 rate.
- Ask your preparer to run both methods under the rules for the year, including the restrictions on this particular vehicle.
- Add the cost of the extra paperwork the actual method needs, in hours.
- Ask what each choice does to the years after this one.
The result is a decision about this car, this tax year, made with the current figure and the current rules. It is not a general answer, and it should be revisited when the car changes.
Who owns the car
If the business owns the vehicle the claim takes one shape; if the owner does and uses it for the business, another. Reimbursement arrangements, where the business pays the owner or an employee for business miles, are a third shape, and how such payments are treated is a payroll tax question as much as a deduction one.
Which of the three applies to you depends on entity tax treatment, and it changes what records are needed and who keeps them.
An employer that reimburses at the IRS rate under an accountable plan paid 70 cents a mile in 2025. Those payments count as a business expense, not wages. Employees who pay the miles themselves get nothing back: unreimbursed employee business expenses have been suspended since 2018.
Where to check
| Source | Use it for |
|---|---|
| IRS standard mileage rates page | The 2025 business figure of 70 cents, the 21 cent medical and moving figure, the 14 cent charitable figure, and next year's update |
| IRS Publication 463 | The record requirements and the restrictions on each method |
| Form 4562 | Depreciation and the limits on a vehicle claimed under actual expenses |
| The instructions for your return | Where the vehicle claim goes and what it asks for |
| A CPA or enrolled agent | Which method this vehicle may use, and whether switching is allowed |
The IRS publishes the per-mile figure by year on its standard mileage rates page: 70 cents for business in 2025, 67 cents in 2024, 65.5 cents in 2023. That is where the number lives, and it is the only place to take it from.
Publication 463 is where the record requirements and the restrictions on each method are written down for the year it covers. The mileage rates overview on this site explains how the figure is used once you have it; the business deductions overview explains what the deduction is then worth.
Common questions
Is the standard rate always the smaller claim?
No. It depends on what the car costs to run, how many business miles it does, and what the rules for the year allow. In the 20,000-mile example, the rate returned $8,400 and actual expenses returned $6,600. A costlier car flips the order. Run both.
Can I claim fuel on top of the rate?
No. Fuel is inside the 70 cent rate, along with maintenance, tires, insurance and registration. Depreciation is in there too. Parking fees and tolls on business travel are the standard exceptions. The IRS page for the year lists the rest; do not add anything that is not on it.
I used one method last year. Can I switch?
Sometimes, and it depends on the vehicle and the method. Moving from actual expenses back to the rate is closed for a car you own. Ask before the return is prepared, with the prior years' returns in front of the person answering.
What is the rate for 2026?
The IRS publishes each year's figure in December for the following year. Take the 2026 number from the standard mileage rates page rather than carrying 70 cents forward.
What is the cheapest way to do this?
Keep the log from the first trip. Every other cost on this page is smaller than the cost of not having it.
