Internal Revenue Service (IRS) Standard Mileage Rates

The Internal Revenue Service (IRS) provides standard mileage rates as optional methods for taxpayers to substantiate their transportation expenses. This Insight reviews how the standard mileage rates are set, who uses them, and a history of the rates.

Who Uses the Standard Mileage Rates?

Standard mileage rates are used for various tax deductions. Under current law, only taxpayers with business income (such as business owners and independent contractors) may claim a deduction for business mileage. The charitable mileage rate is claimed as part of the charitable giving itemized deduction, similar to an in-kind donation. Certain taxpayers, notably members of the Armed Forces, may also use the standard mileage rates in other situations. Employers generally may exclude some business mileage reimbursements from their employees' income for tax purposes. To do so, either the employee must document their business-related automobile expenses, or the employer can multiply the worker's business-related mileage by a standard mileage rate up to the rate set by the IRS.

Prior to 2018, taxpayers could use the medical and moving standard mileage rate to calculate the above-the-line deduction for unreimbursed moving expenses. Additionally, taxpayers who itemized their deductions could use the business standard mileage rate to calculate their unreimbursed employee travel expenses. The 2017 tax law (P.L. 115-97, commonly called the Tax Cuts and Jobs Act) prohibited most taxpayers from deducting unreimbursed employee or moving expenses through 2025.

The standard mileage rate is also used to set the rate of reimbursement for government-sponsored travel. The U.S. General Services Administration's (GSA's) privately owned automobile mileage reimbursement rate is statutorily required to track the standard mileage rates set by the IRS.

Many private businesses, state and local governments, and nonprofits choose to reimburse their employees at the federal rate for simplicity and to maximize the tax-free employee benefit. Federal law only requires employers to reimburse employees for business-related mileage if failing to do so would push the employees' net income below the minimum wage, though some states require employers to reimburse employees for all work-related mileage expenses.

How Are the Standard Mileage Rates Set?

The authorization for a standard mileage rate generally comes from long-standing IRS regulations and guidance. These provide optional methods for satisfying the expense substantiation requirement in statute.

The IRS has an independent contractor conduct an annual study of the fixed and variable costs of operating an automobile. The results of that study are used for the business rate and the medical and moving rate. The rate for charitable uses is set by statute (Internal Revenue Code, §170(i)).

The business standard mileage rate includes all the fixed and variable costs of operating a vehicle. Fixed costs do not vary based on the distance the vehicle travels, including insurance and depreciation of the vehicle's value. Variable costs vary based on the distance the vehicle travels, including the cost of fuel, tires, brakes, and other components. The medical and moving rate includes only variable costs. None of the standard mileage rates include tolls or parking costs.

History of Standard Mileage Rates

Table 1 provides a history of the rates that applied between 2000 and 2024. The IRS generally changes standard mileage rates once per year, with the exception of the rate for charitable purposes. Because the standard mileage rate for charitable purposes is set in statute, it has changed less frequently than the other rates. The current rate of 14 cents per mile was set by the Taxpayer Relief Act of 1997 (P.L. 105-34) and took effect in 1998.

Mid-Year Rate Changes

The IRS provided mid-year rate adjustments three times between 2000 and 2024. In 2005, higher business and medical and moving rates applied during the last four months of the year. In 2011 and 2022, higher business and medical and moving rates applied during the second half of the year. In announcing all three changes, the IRS stated that the modifications were due to "recent increases in the price of fuel."

Special Standard Mileage Rates

Congress has applied different rates to some activities. For example, the standard mileage rate does not apply to the President or Members of Congress. It also does not apply to the reimbursement that the Department of Veterans Affairs pays to some veterans and caregivers for travel costs related to receiving health care.

Other special rates have applied in the past. Previously, rural mail carriers could use a special mileage rate that was higher than the business mileage rate. Congress also increased the charitable mileage rate temporarily for relief workers following certain natural disasters.