What Is the National Standard for Mileage Reimbursement?

The national standard for mileage reimbursement refers to the optional rates set by the Internal Revenue Service (IRS) for calculating the deductible costs of operating a vehicle for business, charitable, medical, or moving purposes. This approach simplifies claiming a deduction by allowing taxpayers to use a per-mile calculation instead of tracking all actual vehicle expenses like fuel and insurance. The IRS establishes these rates to reflect the average costs of operating a vehicle, providing a standardized method for substantiating these expenses.

The Current Standard Mileage Rates

The IRS provides distinct standard mileage rates for different categories, which are subject to annual review. For the 2025 tax year, the rate for business use of a vehicle is 70 cents per mile. This rate covers variable costs like gasoline and oil, as well as fixed costs such as insurance, repairs, and depreciation.

The rate for medical and moving purposes for qualified active-duty members of the Armed Forces is 21 cents per mile for 2025, while the rate for miles driven in service of a charitable organization is 14 cents per mile. Certain vehicle-related expenses are not factored into the business standard mileage rate. Costs such as parking fees and tolls incurred during business travel can be deducted separately as additional expenses.

Who Can Use the Standard Mileage Rate

The standard mileage rate can be used by self-employed individuals and business owners to figure their deductible vehicle expenses on Schedule C (Form 1040), Profit or Loss from Business. If a taxpayer chooses to use the standard mileage rate for a vehicle they own, they must use it in the first year the car is available for business use. In later years, they can choose between the standard mileage rate and the actual expense method.

For employees, the situation is different. The Tax Cuts and Jobs Act of 2017 (TCJA) suspended miscellaneous itemized deductions, including unreimbursed employee business expenses, from 2018 through 2025. This means W-2 employees cannot deduct mileage on their federal tax returns during this period.

The standard mileage rate remains relevant for employees as a benchmark for employers. Many companies use the IRS business rate to determine the amount for tax-free reimbursements to employees who use their personal vehicles for work.

The primary exception for deducting moving expenses applies to active-duty members of the military who are moving due to a permanent change of station. These individuals can still deduct their moving-related mileage. For all other taxpayers, the deduction for moving expenses is suspended under the TCJA, making the moving rate inapplicable to the general public through 2025.

Recordkeeping Requirements for Substantiation

To claim a deduction using the standard mileage rate, the IRS requires taxpayers to maintain a detailed and accurate mileage log. Without this documentation, the IRS can disallow the deduction during an audit. A compliant log must contain specific information for each trip, including:

• The date of the travel
• The total miles driven
• The destination or location of the travel
• The specific business purpose of the trip

Simply stating “business meeting” is often insufficient; the log should provide enough detail to establish the business connection, such as naming the client visited or the project discussed. These records should be created at or near the time the travel occurs. Taxpayers must also record the total number of miles the vehicle was driven during the year for business, commuting, and other personal purposes.

Calculating and Claiming the Deduction

After maintaining a log, the process of calculating the deduction is straightforward. A taxpayer totals all the business miles recorded for the tax year and multiplies that figure by the appropriate standard mileage rate. For example, 10,000 business miles in 2025 multiplied by the 70-cent-per-mile rate results in a $7,000 deduction.

For self-employed individuals, this deduction is reported on Schedule C (Form 1040). The form requires the taxpayer to answer questions about their vehicle use and enter the total deduction on the line for car and truck expenses. This amount reduces the business’s net profit, which in turn lowers overall taxable income.