Good news for business owners who rack up miles on Kansas highways – the IRS has increased the standard business mileage rate for 2025. Here’s what this means for your business and tax planning.
What's Changes for 2025
Starting January 1, 2025, the standard business mileage rate is 70 cents per mile, up from 67 cents in 2024. This 3-cent increase helps offset the costs of operating your vehicle for business purposes, including gas, maintenance, and depreciation.
For medical transportation and military moves, the rate stays at 21 cents per mile. Charitable organization driving remains at 14 cents per mile, as this rate is set by statute.
These rates apply to all vehicle types – whether you’re driving an electric vehicle, hybrid, or traditional gas-powered car. For depreciation calculations, 33 cents of the business rate is treated as depreciation when calculating basis reductions.
Remember that while the standard mileage rate offers simplicity, you still have the option to calculate and deduct your actual vehicle expenses instead. This might be more advantageous depending on your specific situation.
For businesses using FAVR plans to reimburse employees, note that the maximum standard automobile cost has decreased to $61,200 for 2025, down $800 from last year.
Our advice? Start the year right by setting up a reliable system to track your business miles. Whether you choose a mobile app or traditional logbook, accurate documentation is crucial for maximizing your deductions come tax time.
We're Here to Help
Need help determining the best vehicle expense tracking method for your business? Our team of advisors is here to help you make the right choice for your situation. Contact us for a consultation.
Source: IRS Notice 2025-5
