What is the IRS standard mileage rate for 2025 and how do I deduct vehicle expenses?

The IRS standard mileage rate for 2025 is 70 cents per mile for business use of a personal vehicle — up from 67 cents in 2024. This is one of the most commonly missed deductions for self-employed individuals, freelancers, and gig workers.

Two methods for deducting vehicle expenses:

1. Standard Mileage Rate (simpler)

Multiply your total business miles by $0.70. For example, if you drove 10,000 miles for business in 2025, your deduction is $7,000. You can also add:

• Business-related parking fees
• Tolls

You must choose this method in the first year you use the car for business. Once you switch to actual expenses, you generally can't switch back for that vehicle.

2. Actual Expense Method (often larger deduction)

Deduct the actual costs of operating your vehicle for business, proportional to your business-use percentage:

• Gas and oil
• Insurance
• Registration and licensing fees
• Repairs and maintenance
• Depreciation (limited to business-use percentage)
• Car wash, tolls, parking

If your vehicle is 80% business use, you can deduct 80% of these costs.

What counts as a business mile?

• Driving to client meetings, job sites, or customer locations
• Going from one work location to another
• Driving to pick up business supplies
• Travel between a home office and work locations

What does NOT count:

• Your regular commute from home to a fixed office — this is personal travel, not business
• Personal errands mixed with business trips

Documentation requirements:

The IRS requires a contemporaneous mileage log — keep it as you drive, not reconstructed at year-end. Your log should show: date, destination, business purpose, and odometer reading. Apps like MileIQ, Everlance, or TripLog automate this.

Where to claim it:

• Self-employed (Schedule C filers): Part II, Line 9
• Employees: Unreimbursed employee mileage is no longer deductible on federal returns under current law (TCJA suspended this through 2025; under OBBBA, this suspension was made permanent for most employees)
• Armed Forces reservists, qualified performing artists, and fee-based government officials retain the deduction

Important: If you use Section 179 or bonus depreciation to write off a vehicle, you generally cannot also use the standard mileage rate for that same vehicle.