IRS Business Mileage Rate for 2025

The IRS recently announced the business mileage rate for 2025.  Business owners can typically claim a deduction of 70 cents per mile driven for tax purposes in 2025.  While the business mileage deduction is an especially useful deduction for business owners, many business owners are not taking all the necessary steps to ensure they are taking full advantage of the business mileage deduction.  This blog is intended to provide helpful tips to business owners to make sure they are taking full advantage of and properly documenting the business mileage deduction.

Keep a Log of all Business and Personal Miles.  It is important to keep a log of all your business and personal miles.  Failing to keep a proper mileage log is perhaps one of the biggest pitfalls business owners experience at an IRS Audit.  Unfortunately, many more business owners fail to properly log their miles than those who do adequately track and record miles driven. 

Your log should include the date of the trip, odometer readings, miles driven, trip destination, and the business purpose of the trip.  IRS Publication 463 contains examples of trip logs.  Apps like Uber may record business miles driven for the app, but they do not necessarily record miles all of your deductible miles such as those incurred in returning home. 

Business miles can be deducted for any trip with a business purpose.  Such trips may include trips to meet with clients or customers, trips to pick up supplies needed for the business, trips to perform work at a customer’s site, trips to trade shows, or trips to the airport for business travel. 

Keep your mileage log contemporaneous.  The law requires the mileage log to be made contemporaneously.  That is to say, you should be recording your trips as you drive them.  You should not be recording your mileage after the trips occurred.  Not only is keeping a contemporaneous log more likely to be accepted by the IRS at audit, but it is more likely to contain all your miles.  You may forget to include mileage for trips if you are not recording your time as it occurs. 

Am I Even a Business?  There are many people who may not realize they are running a business.  If you have a business (as defined by the tax code), you are potentially eligible for the business mileage deductions.  Those hours spent in traffic can be potential windfall to you on Tax Day.

A business owner can be pretty much anybody who is not a wage earner. It should go without saying people working for apps like Uber, Grubhub, or Lyft should be claiming mileage deductions.  Other workers who are working as independent contractors can be taking mileage deductions as well.

RJS LAW is a full-service law firm that provides tax services to businesses and individuals.  Our services include help with IRS Audits as well as tax planning, estate planning, and bankruptcy.  Please contact us at 619-595-1655 or on the web at RJS LAW for a free consultation. 

Written by Joseph Cole, Esq., LL.M.