IRS Mileage Rate 2025: What to Know
Every year, small business owners in Florida ask themselves, “What will be the new IRS mileage rate in 2025? The explanation is straightforward. When tax time comes around, your mileage could save you a lot of money if you drive to job sites, run errands, visit clients, deliver goods, or otherwise use your personal vehicle for business purposes.
The catch is that the IRS mileage rate for 2025 hasn’t been made public yet. New mileage rates are typically announced by the IRS close to the end of each year. Therefore, at this point, you don’t need to know the precise rate yet in order to plan, prepare, and establish healthy habits.
The good news? To begin properly managing your mileage, you do not require the verified number.
In actuality, knowing the cents-per-mile rate is far less significant than knowing how mileage reimbursement operates, who is eligible, and what documentation is required.
Let’s go over everything with simplicity, clarity, and a dash of common sense.
What Is the IRS Mileage Rate for 2025?
Many people are speculating online because the IRS hasn’t formally disclosed the mileage rate yet. Some people predict that it will rise, while others predict that it will fall.
What matters, though, is this:
The IRS mileage rate for 2025 is intended to cover or subtract the typical expenses of using your own car for work, including gas, upkeep, insurance, tires, repairs, and normal wear and tear.
When the official number is released, the IRS is essentially saying:
“This is our estimate of the cost of a one-mile business drive.”
You should review the official IRS update:
IRS UPDATE
Why This Rate Matters to Small Businesses in Florida
With thousands of microbusiness owners, contractors, freelancers, accountants, real estate agents, HVAC specialists, cleaning firms, Uber drivers, and landscaping crews, Rida boasts a robust service-based economy.
For work, the majority of them drive a lot.
Making an accurate mileage claim can:
Reduce the taxable income of your company.
Maintain a higher income in your bank account.
Make your spending more transparent and easier to defend.
Keep yourself safe during audits.
Mileage is more than just “a deduction.”
If you don’t track it properly, mileage is money wasted.
IRS Mileage vs Mileage Reimbursement
People find this section confusing, so let’s simplify it:
IRS Mileage Rate: The average cost per mile that the IRS permits to be deducted.
Reimbursement: When a company uses that rate (or another rate) to pay an employee for business mileage.
You don’t “reimburse” yourself if you work for yourself.
On your tax return, you instead deduct your mileage.
If you have workers, you can pay them back using:
When it is announced, the IRS mileage reimbursement rate for 2025, or
a personalized reimbursement rate that your company selects.
However, the excess amount is considered taxable income if it exceeds the IRS rate.
Here’s where accurate bookkeeping is important.
Indeed, we deal with that: BOOK NOW
How to Qualify for a Business Mileage Deduction
You can’t deduct all the miles you drive, only the miles used for business.
Business mileage includes things like:
- Driving to customer appointments
- Picking up supplies for your business
- Meeting vendors or contractors
- Travel between job sites
- Visiting your business bank or post office
Mileage you cannot deduct:
- Driving from home to your regular workplace
- Personal errands, even if they happen on the same trip
- Family trips, even if you answer work calls on the way
You can mix business and personal miles on the same day, just only count the part that was business.
The Key to Claiming Mileage: Records
People ask their accountant:
“Don’t my gas receipts count?”
No. Fuel receipts are not mileage records.
To claim mileage, you must track:
- Date of the trip
- Starting location
- Ending location
- Purpose of the trip
- Total miles driven
That’s it.
Simple. Not always fun. But worth it.
Easy ways to track mileage:
- QuickBooks mileage tracker
- Everlance
- MileIQ
- Built-in mileage tracking in many banking apps
Or use the old notebook-in-the-glove-box method, just don’t forget to write.
Let’s Talk About the “Why Bother?” Factor
Business owners usually fall into two categories:
| Type | Mindset | Result |
|---|---|---|
| The Tracker | Writes mileage down consistently | Saves thousands |
| The Forgetter | Says “I’ll remember later” (but doesn’t) | Pays more tax than necessary |
Most small business owners want to track mileage, but life gets busy.
And honestly? You’re managing employees, customers, inventory, service calls, messages, invoices… tracking mileage feels tiny.
But here’s what’s real:
Even 8–10 local business trips a week can add up to several thousand dollars of business mileage deduction per year.
And that means lower taxable income.
That’s real savings. Not theoretical.
How Mileage Fits Into Bigger Tax Deductions for Small Business
Mileage is just one piece of the tax strategy puzzle.
Other common deductions include:
- Home-office space
- Phone/internet used for business
- Equipment and software
- Contract labor
- Insurance
- Meals with clients (yes, still deductible, just differently now)
The small business that tracks expenses well?
Pays less tax, legally.
If you want help with this, we work specifically with Florida small businesses
Should You Track Actual Car Expenses Instead of Mileage?
You can. The IRS allows two methods:
1. Standard Mileage Method
(Using the irs mileage rate 2025 once released)
- Simple
- Clean
- No complicated breakdowns
2. Actual Expense Method
You track:
- Gas
- Tires
- Car insurance
- Repairs
- Oil changes
- Depreciation
Then your deduction is based on the business-use percentage.
So which one is better?
Most small business owners prefer standard mileage because it’s easy.
But if you drive a large SUV, truck, or luxury vehicle and use it heavily for business?
Sometimes actual expenses can come out higher.
We can calculate which method saves you more.
The IRS Mileage Reimbursement Rate 2025 for Employees
Let’s say you have employees who use their cars for work:
A fair reimbursement protects:
- Them (from paying business expenses out-of-pocket)
- You (from messy payroll and tax complications)
When the irs mileage reimbursement rate 2025 is released, update your reimbursement policy so employees get a consistent non-taxable reimbursement.
This is one of the easiest ways to boost morale with zero tax cost to your company.
When Will the IRS Announce the Mileage Rate?
Typically:
- Announcement: Late November or December
- Effective Date: January 1
We’ll update this article and our clients as soon as the irs mileage rate 2025 becomes official.
The Bottom Line
You don’t need to wait for the official number to get organized.
You only need:
- A clear system for tracking miles
- A basic understanding of irs mileage
- A consistent routine
If you start tracking today, you’ll automatically benefit when the IRS releases the official rate.
If you don’t track it?
You’ll probably pay more tax than you need to.
And that never feels good.
Want us to handle it for you?
We can set up your mileage system, bookkeeping, and tax planning, all tailored to Florida small businesses.
Because keeping your books clean shouldn’t feel overwhelming, and you’re not meant to figure it out alone.
