As part of your year-end planning, it’s important to stay current on tax-related updates that impact your operations. On that note, the IRS recently released Notice 2025-5, announcing adjustments to the standard mileage rates that are relevant for businesses and individuals alike.
2025 IRS Standard Mileage Rates
Effective January 1, 2025, the new standard mileage rates for the use of a car, van, pickup, or panel truck are:
- 70 cents per mile for business use (increased from 67 cents in 2024)
- 21 cents per mile for medical travel
- 21 cents per mile for moving purposes (for qualified active-duty military personnel)
- 14 cents per mile for charitable service (unchanged, set by statute)
These rates apply uniformly to electric, hybrid, gasoline, and diesel-powered vehicles.
Business Law Considerations
From a business law standpoint, accurate mileage tracking and compliance are essential, especially for companies that reimburse employees or deduct vehicle-related expenses. With the business use rate rising by 3 cents, companies should review their internal reimbursement policies to ensure alignment with the IRS guidance.
Additionally, Notice 2025-5 includes updates to the maximum vehicle cost that can be used under fixed and variable rate (FAVR) reimbursement plans, which is relevant for employers with standardized mileage reimbursement programs.
How Strategy Law LLP Can Help
At Strategy Law LLP, our business law attorneys help companies ensure employment law and tax compliance and minimize risk. We work closely with our clients to review employee reimbursement policies, navigate IRS guidelines, and implement legal best practices that support long-term business health.
If your business relies on mileage deductions or offers vehicle reimbursements, now is the time to update your policies with the 2025 IRS changes in mind.
Contact us today to schedule a consultation and stay ahead of business law compliance.
This blog is written as of August 2025. Recommendations and legal requirements are changing rapidly, so please continue to review our legal updates or review postings on relevant government websites.
All blogs on this site are for educational purposes only, do not constitute legal advice or opinion, and should not be applied to your situation, or any specific situation, without consultation with counsel. Strategy Law, LLP does not provide any legal advice concerning any matter discussed in a blog except upon formal engagement including, without limitation, execution of Strategy Law, LLP’s formal legal services agreement, and with respect to specific factual situations. No blog constitutes a guaranty, warranty, or prediction regarding the result of any legal matter discussed in the blog or any representation
