The IRS just increased the standard mileage rate for employees. Here's how it could save you money


IRS Boosts Standard Mileage Rate: Discover How This Change Can Save You Money on Business Travel

If you use your vehicle for work, there’s good news: your reimbursement check or tax deduction could be on the rise this year.

WASHINGTON — The Internal Revenue Service (IRS) has announced an increase in the standard mileage rate for business travel, which could mean larger reimbursement checks for some employees or a reduction in their tax obligations.

Earlier this week, the IRS revealed that the new standard mileage rate would take effect starting January 1st. Since that day was a federal holiday, with many businesses closed, most commuters will begin to notice the updated rate when they resume work on Friday.

For the year 2025, the standard mileage rate for business-related travel in cars, trucks, vans, or other vehicles has been adjusted to 72.5 cents per mile, reflecting a 2.5 cent increase from the previous rate of 70 cents.

This adjustment aims to counter rising inflation and applies to a range of vehicles, including traditional gasoline and diesel models, as well as electric and hybrid cars used for business purposes.

This change comes at a time when fuel prices are on a downward trend. Around this time last year, the average price of a gallon of gas was approximately $3.06. Currently, that average has fallen to about $2.83, as reported by AAA.

Do employers have to use the standard rate? 

The standard mileage rate is optional, but suggested by the federal government. Many employers who give reimbursement per mile, such as restaurants with delivery drivers, use the standard rate to determine what to compensate their drivers for using their own car. 

But for employees who don’t get a per-mile reimbursement, there’s still a way to get cash back from using a personal car for work. When filing taxes, employees can estimate how much they drove for work, applying the standard mileage rate to potentially get some money back. 

People who use their car for work don’t have to use the standard rate though. They may instead calculate the actual costs of using their vehicle when it comes time for tax season. 

The rates for some related activities have also changed in the new year, according to the IRS.

  • 20.5 cents per mile driven for medical purposes, down a half cent from 2025.
  • 20.5 cents per mile driven for moving purposes for certain active-duty members of the Armed Forces (and now certain members of the intelligence community), reduced by a half cent from last year.
  • 14 cents per mile driven in service of charitable organizations, equal to the rate in 2025.

You May Also Like

Powerful Hurricane Polo drenches Mexico's coast from offshore as Nolo nears Hawaii

Powerful Hurricane Polo Soaks Mexico’s Coast as Nolo Nears Hawaii

MEXICO CITY — Residents along Mexico’s Pacific coast piled sandbags around beachfront…
‘Zombie’ allegedly bites chunk out of victim’s head in West Coast attack

‘Zombie’ Allegedly Bites Chunk From Victim’s Head in West Coast Attack

A random attack in downtown Seattle last week left a woman with…
Pittsburgh doctor stabbed to death after intruder allegedly attacks him, wife as they slept: police

Pittsburgh Doctor Fatally Stabbed in Alleged Home Invasion Attack, Police Say

A doctor at a Pittsburgh children’s hospital was fatally stabbed and his…
NYC Episcopal priest Flourish Klink claims Jesus is trans and God is nonbinary

Episcopal Priest Flourish Klink Claims Jesus Is Trans, God Nonbinary

A New York City Episcopal priest has sparked controversy after declaring in…
Iranian president blames US for Middle East conflict while denying nuclear ambitions, offers to dilute uranium

Iranian President Blames US for Middle East Conflict, Denies Nuclear Ambitions and Offers to Dilute Uranium

Iranian President Masoud Pezeshkian said Thursday that Tehran has no interest in…
Nor’easter will slam parts of NYC-area with coastal flooding and wild winds this weekend: forecasters

Nor’easter to Slam NYC Area With Coastal Flooding, High Winds

A potent September nor’easter is expected to bring coastal flooding and damaging…
Suspect in Pittsburgh doctor's murder had been released without bail on prior burglary charge: court docs

Pittsburgh Doctor Murder Suspect Was Released Without Bail on Burglary Charge, Court Records Show

A Pittsburgh pediatrician was killed and his wife hospitalized after a stabbing…
Netanyahu says

Israeli Prime Minister Netanyahu Speaks Out

Washington — Israeli Prime Minister Benjamin Netanyahu launched a sharp attack on…
Pope Leo XIV begins historic 4-day visit to France

Pope Leo XIV Begins Landmark Four-Day Visit to France

Pope Leo lands in France for four-day visit Pope Leo arrived in…
Iranian President Pezeshkian: 'We Will Keep Resisting — We Will Find Ways'

Iran’s President Pezeshkian Vows to Keep Resisting Pressure

In an interview broadcast Thursday on Fox News Channel’s “Special Report,” Iranian…
Nor'easter to bring weekend flooding, high winds to NYC-area

Nor’easter to Bring Weekend Flooding, High Winds to NYC Area

A powerful nor’easter is bearing down on New York City, bringing the…
NYC Council takes aim at AI companies with new bills mandating 'kill switches,' offering cash for whistleblowers

NYC Council Proposes AI Kill-Switch Bills, Whistleblower Rewards

New York City lawmakers are moving to regulate artificial intelligence, unveiling a…