Title: The 2025 Mileage Rate Is Up — Here’s What It Means for You

If you use your personal vehicle for business, there’s good news to start 2025. The IRS has raised the standard mileage rate to 70 cents per mile, up from 67 cents in 2024. That might seem small at first glance, but it can make a real difference when you add it up over a year. For many small business owners and self-employed individuals across Green Bay and De Pere, this change means more potential deductions and better opportunities for tax savings.

Let’s put it in perspective. If you drive 10,000 business miles in 2025, that’s a $7,000 deduction — $300 more than last year just by updating your mileage rate. Whether you’re a contractor, realtor, consultant, or small business owner, tracking your miles can directly reduce your taxable income. It’s one of those simple, consistent wins that add up over time — and it’s part of smart, proactive tax preparation.

What Counts as Business Mileage?

To qualify, your miles must be ordinary and necessary for your trade or business. That includes driving to meet clients, attend networking or professional events, pick up supplies, or visit worksites. However, your daily commute from home to your regular office doesn’t count. There’s an exception if you have a qualified home office — in that case, trips from your home to a client’s location or another temporary work site are deductible. Many small business owners around Green Bay and De Pere are surprised by how quickly those miles add up once they start tracking them carefully.

Choosing Between Standard Mileage and Actual Expenses

You have two main options when deducting vehicle expenses:

1. The Standard Mileage Rate (70¢ per mile for 2025)

2. The Actual Expense Method, where you track gas, maintenance, repairs, insurance, registration, and depreciation.

The standard mileage rate is easier and cleaner for most taxpayers — you just multiply your business miles by the IRS rate. But if you drive a lot or own a higher-cost vehicle, it’s worth comparing both methods. Sometimes actual expenses can yield a larger deduction, especially if your operating costs are high. Whichever you choose, consistency matters — once you pick a method for a particular vehicle, you generally stick with it unless you qualify to switch.

Why Recordkeeping Matters More Than Ever

The biggest issue the IRS sees when reviewing vehicle deductions isn’t inaccuracy — it’s lack of documentation. You’ll need to show when, where, and why you drove for business. Apps like MileIQ, Everlance, and QuickBooks can automatically track your mileage and categorize trips. That means less stress and more accuracy when it’s time for tax preparation or an audit. If you prefer a manual method, a simple logbook with dates, destinations, and trip purposes works too — just make sure it’s consistent and contemporaneous.

Additional 2025 Mileage Rates

For 2025, the IRS also updated other mileage categories:

• Medical and moving purposes: 21 cents per mile

• Charitable driving: 14 cents per mile (unchanged)

While these rates are lower than the business rate, they can still make a meaningful difference for those who volunteer regularly or have significant medical travel expenses.

Putting It All Together

Tracking mileage might not be glamorous, but it’s one of the most practical and effective deductions available to small businesses. Every mile you document accurately helps you keep more of what you earn. Combined with a strategic review of other deductions — like Section 179 equipment expensing, home-office deductions, and retirement contributions — you can build a more tax-efficient year overall.

At Millhouse Accounting, we help individuals and business owners across Green Bay and De Pere navigate these updates with confidence. The new 2025 mileage rate is just one of many changes that could affect your tax picture this year. If you’d like to make sure your deductions are optimized, or if you want to compare your actual vehicle costs to the standard rate, let’s talk.

Smart planning and proactive guidance today can save you money and headaches tomorrow — and that’s the kind of preparation that makes tax season a little easier for everyone.