31 January 2025

IRS releases federal mileage rates and luxury vehicle limit for 2025

Effective January 1, 2025, the business standard mileage rate for use of a car (including vans, pickup trucks and panel trucks) increases from $0.67 to $0.70, and the rate for medical and relocation mileage is unchanged at $0.21. Mileage related to charity is set by law and remains at $0.14 per mile. (Notice 2025-05; Notice 2024-08.)

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses incurred between January 1, 2018, and December 31, 2025, except members of the Armed Forces on active duty moving under orders to a permanent change of station.

Luxury vehicle limit for 2025

Pursuant to the vehicle valuation limit that applies to use of the optional fleet-average and vehicle cents-per-mile valuation methods, the maximum fair market value of a vehicle (including trucks and vans) first made available to employees in calendar year 2025 decreases from $62,000 to $61,200.

Federal mileage rates for 2024 and 2025

Type of mileage

Effective January 1, 2024

Effective January 1, 2025

Business standard

$0.67

$0.70

Charity

$0.14

$0.14

Relocation and medical

$0.21

$0.21

* * * * * * * * * *
Contact Information

For additional information concerning this Alert, please contact:

Workforce Tax Services - Employment Tax Advisory Services

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

Document ID: 2025-0365