What Is Included in the IRS Standard Mileage Rate?

The IRS standard mileage rate offers a simplified way for taxpayers to deduct the costs of using a personal vehicle for business, medical, or charitable purposes. Rather than tracking every individual expense, this rate provides a fixed per-mile amount that accounts for various vehicle operating costs. It serves as an alternative to calculating and deducting actual expenses, making the deduction process more straightforward. This article clarifies which costs are encompassed by the standard mileage rate, identifies expenses that can be deducted separately, outlines the different mileage categories, and details the essential documentation required.

Understanding Covered Costs

The IRS standard mileage rate covers the average costs associated with operating a vehicle. This rate is determined annually by the IRS through studies that analyze both fixed and variable expenses of car ownership and use. These studies ensure the rate reflects general economic conditions and typical expenditures for vehicle operation.

Specific costs bundled into the standard mileage rate include fuel and oil. Routine maintenance and repairs are also covered, encompassing typical servicing needs like oil changes, tire rotations, and brake work. Depreciation, representing the wear and tear on the vehicle and its reduction in value, is a significant component. Vehicle insurance and registration fees are also factored into the rate.

Expenses Not Included

While the standard mileage rate covers many vehicle operating costs, certain expenses are not included and can be deducted in addition to the mileage rate. These distinct deductions supplement the standard rate, allowing taxpayers to claim a more comprehensive total.

Tolls, such as those incurred on highways or bridges, can be deducted separately. Parking fees paid during business, medical, or charitable trips are also deductible in addition to the mileage rate. Interest paid on a car loan for a vehicle used for business purposes can be partially deductible, but this deduction applies only to the business portion of the interest. State and local personal property taxes assessed on the vehicle can sometimes be deducted separately.

Different Mileage Categories

The IRS publishes distinct standard mileage rates for different types of deductible travel, reflecting varying cost considerations and tax treatments. Taxpayers must identify the correct category for their travel to apply the appropriate rate.

Business Mileage

Business mileage applies to travel between a regular workplace and a temporary work location, travel from one work location to another, or travel to meet clients or customers. Commuting from home to a regular workplace is generally not deductible. Examples include sales calls, site visits, meetings with clients, and travel between different office locations. For 2025, the business mileage rate is 70 cents per mile.

Medical Mileage

Medical mileage covers travel for medical care, including diagnosis, cure, mitigation, treatment, or prevention of disease. This includes trips to doctor’s appointments, hospital visits, and therapy sessions. The medical mileage rate for 2024 and 2025 is 21 cents per mile. This deduction is typically subject to a threshold, where total medical expenses, including mileage, must exceed 7.5% of the taxpayer’s adjusted gross income.

Charitable Mileage

Charitable mileage applies to travel performed for the benefit of a qualified charitable organization. Examples include driving for a soup kitchen, transporting goods for a charity event, or volunteer driving for an approved charity. For charitable mileage, only the cost of operating the vehicle is deductible; depreciation is not included in this rate. The charitable mileage rate for 2024 and 2025 is 14 cents per mile.

Moving Mileage

Moving mileage for most taxpayers is suspended from deduction for tax years 2018 through 2025 due to the Tax Cuts and Jobs Act. An exception exists for members of the Armed Forces who move under military orders to a permanent change of station. For qualifying military personnel, the moving mileage rate for 2024 and 2025 is 21 cents per mile.

Documentation Requirements

Accurate and detailed record-keeping is essential for substantiating mileage deductions. The IRS requires specific information to be documented to support any mileage claims. Maintaining thorough records helps ensure compliance and can be crucial in the event of an audit.

For each trip, taxpayers must record the date of the trip, the starting and ending locations, and the total mileage driven. It is also necessary to clearly state the purpose of the trip, whether it is for business, medical, or charitable reasons. This detailed information provides the necessary evidence for the deduction.

Various methods can be used for record-keeping, including contemporaneous logs maintained manually in a notebook or electronically through mileage tracking applications. Spreadsheets are another effective tool for organizing mileage data. Additionally, taxpayers should record their vehicle’s odometer readings at the beginning and end of each tax year to support total mileage driven. The IRS emphasizes that records should be kept timely and accurately, ideally as trips occur, to ensure reliability.