Calculate your mileage reimbursement or deduction using current IRS standard mileage rates. Covers business (70 cents/mile), medical (21 cents/mile), and charity (14 cents/mile) rates for 2025. See monthly and annual totals.
The IRS standard mileage rate is the simplified per-mile rate businesses and individuals can use to calculate vehicle-related tax deductions or reimbursements. For 2025, the rates are: 70¢/mile for business use (the most common), 21¢/mile for medical or moving (very limited eligibility), and 14¢/mile for charitable purposes. These rates are adjusted annually by the IRS based on fuel prices, vehicle costs, insurance, and other factors. The business rate covers gas, oil, repairs, insurance, registration, and depreciation — all rolled into a single per-mile number.
For self-employed individuals and business owners, mileage deduction is one of the most commonly claimed (and frequently overlooked) tax benefits. Driving 15,000 business miles annually at 70¢/mile generates $10,500 in deductions. At a 30% combined tax bracket, that's $3,150 in tax savings annually. For employees, federal tax law (post-2017 TCJA) no longer allows unreimbursed employee business expense deductions, so accurate employer reimbursement at IRS rates is the only path to capturing this value. Many employers reimburse below the IRS rate (e.g., 50¢/mile), which means employees should track mileage and negotiate appropriately.
This calculator computes mileage reimbursement/deduction using the current IRS standard rates. Use it for: tracking annual deductible miles, monthly expense reporting, evaluating employer reimbursement adequacy, estimating tax impact of mileage deductions, and planning for upcoming tax filings. Important context: you cannot mix methods — choose between standard mileage rate OR actual expenses (gas, repairs, depreciation, insurance, etc.) for the year. Standard mileage simpler; actual expenses sometimes higher for vehicles with high operating costs (luxury, high-maintenance, low MPG). Accurate mileage logs are required either way — IRS requires contemporaneous record (date, miles, business purpose, beginning/ending odometer). Apps like MileIQ, QuickBooks Self-Employed, and Stride automate this.
Consultant drives 18,000 business miles/year visiting clients. Annual deduction: 18,000 × 70¢ = $12,600 Tax savings: 22% federal bracket: $2,772 22% federal + 5% state: $3,402 Plus self-employment tax savings: $12,600 × 14.13% effective SE = $1,780 Total annual tax savings: ~$5,180 Significant deduction. Most self-employed individuals underclaim mileage due to poor tracking. Using mileage app catches all business miles automatically — captures $1,000-$2,000+ in additional deductions vs. self-reported tracking. Plus deductible: tolls and parking ($200-$500 typical), separately from mileage rate.
Real estate agent drives 30,000 business miles/year (showing properties, client meetings, area tours). Annual deduction: 30,000 × 70¢ = $21,000 Tax savings: 24% federal bracket: $5,040 24% federal + 7% state: $6,510 Plus SE tax: $21,000 × 14.13% = $2,967 Total: ~$9,480 annual tax savings For high-mileage professionals (real estate agents, sales reps, contractors), mileage deduction is among the largest single deductions on tax return. Worth ~$10K/year for 30K-mile drivers. Compare to actual expense method for older or high-maintenance vehicles. If actual gas + maintenance + insurance + depreciation > $21K for 30K business miles, actual method better.
Sales rep drives 12,000 business miles/year. Employer reimburses at 50¢/mile (below IRS 70¢ rate). Employer reimbursement: 12,000 × 50¢ = $6,000 IRS rate equivalent: 12,000 × 70¢ = $8,400 Underpayment: $2,400/year ($200/month) Pre-TCJA (before 2018), the $2,400 gap was deductible as unreimbursed employee business expense. Post-TCJA, this deduction was eliminated for W-2 employees. Options for sales rep: 1. Negotiate higher reimbursement rate (cite IRS standard 70¢) 2. Track total business miles carefully — employer may reimburse for additional miles missed 3. Discuss accountable plan with employer (separate $X/month auto allowance — taxable to employee but doesn't require itemization) 4. Discuss vehicle benefits (company car, fuel cards) For 1099 contractors at same situation: the $8,400 is fully deductible on Schedule C regardless of what client pays. Big advantage of contractor status for high-mileage workers.
Use this calculator for tracking deductible business mileage, calculating tax deductions for self-employed individuals, estimating employer reimbursement adequacy, planning annual mileage-based tax savings, or comparing to actual expense method.
Pair with self-employment-tax (overall self-employment tax planning), fuel-cost (per-trip cost analysis), and tax calculators for broader planning.
Important mileage deduction considerations:
1. **Contemporaneous records required.** IRS requires real-time mileage logs (date, miles, business purpose, odometer readings). After-the-fact reconstruction usually denied in audits. Use mileage apps for compliance.
2. **Standard vs. actual expense method choice locked in early.** First year of business use chosen method. Standard mileage can switch to actual later; actual cannot switch to standard. Choose carefully.
3. **Commuting NOT deductible.** Trips between home and primary office are personal commute, never deductible. Exception: home office qualifying as principal place of business — trips from home office to clients/sites then deductible.
4. **TCJA eliminated employee business expense deduction.** W-2 employees can no longer deduct unreimbursed mileage on personal returns (post-2017). Only self-employed and accountable plan reimbursement provide tax benefit.
5. **High-mileage drivers often prefer actual expense.** Luxury vehicles, high-maintenance vehicles, low MPG vehicles may have higher actual costs than standard mileage rate captures. Track both methods first year to compare.
6. **Rate covers ALL vehicle costs except parking and tolls.** Don't double-dip — can't deduct insurance, repairs separately when using standard mileage. Those costs are included in the rate.
7. **Self-employment tax savings amplify mileage benefit.** Mileage deduction reduces net SE income, reducing both income tax AND 15.3% SE tax. Effective tax savings rate often 35-45% of mileage amount.
8. **Apps automate compliance.** MileIQ, QuickBooks Self-Employed, Stride, Hurdlr automatically track drives via GPS and let you classify as business/personal. Captures 20-50% more deductible mileage than self-reported tracking.
9. **Rate changes annually.** IRS announces new rates each November/December for following year. Check current rate before filing.
10. **Mid-year rate changes possible.** IRS has occasionally adjusted business mileage rate mid-year for fuel price spikes (last in 2022). Track miles separately for each rate period.
11. **State rates may differ.** Some states have separate state-level mileage rates for state income tax. Check your state.
12. **Vehicle ownership requirement.** Standard mileage requires you own or lease the vehicle. Cannot use for vehicle owned by employer or for occasional rental.
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Reimbursement
$350.00
Rate
70.0¢/mile
Annual Miles
6,000
Annual Reimbursement
$4,200.00
| Month | Miles | Reimbursement | Cumulative |
|---|---|---|---|
| 1 | 500 | $350.00 | $350.00 |
| 2 | 500 | $350.00 | $700.00 |
| 3 | 500 | $350.00 | $1,050.00 |
| 4 | 500 | $350.00 | $1,400.00 |
| 5 | 500 | $350.00 | $1,750.00 |
| 6 | 500 | $350.00 | $2,100.00 |
| 7 | 500 | $350.00 | $2,450.00 |
| 8 | 500 | $350.00 | $2,800.00 |
| 9 | 500 | $350.00 | $3,150.00 |
| 10 | 500 | $350.00 | $3,500.00 |
| 11 | 500 | $350.00 | $3,850.00 |
| 12 | 500 | $350.00 | $4,200.00 |