Tax Updates  

IR-2024-312, Dec. 19, 2024

WASHINGTON — The Internal Revenue Service today announced that the optional standard mileage rate for automobiles driven for business will increase by 3 cents in 2025, while the mileage rates for vehicles used for other purposes will remain unchanged from 2024.

Optional standard milage rates are used to calculate the deductible costs of operating vehicles for business, charitable and medical purposes, as well as for active-duty members of the Armed Forces who are moving.

Beginning Jan. 1, 2025, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

70 cents per mile driven for business use, up 3 cents from 2024.

21 cents per mile driven for medical purposes, the same as in 2024.

21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces, unchanged from last year.

14 cents per mile driven in service of charitable organizations, equal to the rate in 2024.

The rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.

While the mileage rate for charitable use is set by statute, the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes, meanwhile, is based on only the variable costs from the annual study.

Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. And only taxpayers who are members of the military on active duty may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station.

Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle.

Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the first year the automobile is available for business use. Then, in later years, they can choose to use the standard mileage rate or actual expenses.

For a leased vehicle, taxpayers using the standard mileage rate must employ that method for the entire lease period, including renewals.

Notice 2025-5 PDF contains the optional 2025 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed-and variable rate (FAVR) plan. The notice also provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in 2025 for which employers may calculate mileage allowances using a cents-per-mile valuation rule or the fleet-average-valuation rule.

Tax-related identity theft occurs when a thief uses someone’s stolen Social Security number to file a tax return and claim a fraudulent refund. The victim may be unaware that this has happened until they e-file their return. Even before the victim files their return, the IRS may send the taxpayer a letter saying the agency identified a suspicious return using the stolen SSN.

Here are some things people should know about identity theft, including warning signs and steps to take after identity theft occurs.

Warning signs that a theft occurs

Taxpayers should be alert to possible tax-related identity theft if they are contacted by the IRS or their tax preparer about:

• More than one tax return being filed using the taxpayer’s SSN.

• Additional tax owed.

• A refund offset.

• Collection actions taken against the taxpayer for a year when they did not file a tax return.

• IRS records indicating they received wages or other income from an employer for whom the taxpayer did not work.

Taxpayers who suspect they are a victim of ID theft should continue to pay their taxes and file their tax return, even if they must do so on paper.

Steps to take if someone becomes a victim

The taxpayer should:

• File a complaint with the FTC at identitytheft.gov.

• Contact one of the three major credit bureaus to place a fraud alert on their credit records.

• Contact their financial institutions to close any financial or credit accounts opened without permission or that were tampered with by identity thieves.

• Respond immediately to any IRS notice and call the number provided in the letter.

• Complete IRS Form 14039, Identity Theft Affidavit. They can use a fillable form on IRS.gov, print it, then attach the form to their tax return and mail according to instructions.

Taxpayers who previously contacted the IRS and did not have a resolution can contact the agency for specialized assistance at 1-800-908-4490.

Taxpayers should remember that the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and through social media channels.

People can report suspicious online or emailed phishing scams to:  phishing@irs.gov. For phishing scams by phone, fax or mail, call 1-800-366-4484. They can report IRS impersonation scams to the Treasury Inspector General for Tax Administration’s IRS Impersonation Scams Reporting.

 The IRS offers several payment options where taxpayers can pay immediately or arrange to pay in installments. Taxpayers can pay online, by phone, or with their mobile device and the IRS2Go app. Taxpayers should pay in full whenever possible to avoid interest and penalty charges.

Here are some electronic payment options for taxpayers:

• Electronic Funds Withdrawal . Taxpayers can pay using their bank account when they e-file their tax return. EFW is free and only available through e-File.

• Direct Pay . Taxpayers can pay directly from a checking or savings account for free with IRS Direct Pay. Taxpayers receive instant confirmation after they submit a payment. With Direct Pay, taxpayers can schedule payments up to 30 days in advance. They can change or cancel their payment two business days before the scheduled payment date. Taxpayers can choose to receive email notifications each time they make a payment.

• Credit or debit cards . Taxpayers can also pay their taxes by debit or credit card online, by phone, or with a mobile device. Card payment processing fees vary by service provider and no part of the service fee goes to the IRS. Telephone numbers for service providers are at http://www.irs.gov/payments .

• Pay with cash . Taxpayers can make a cash payment at a participating retail partner. Taxpayers can do this at more than 7,000 locations nationwide. Taxpayers can visit http://www.IRS.gov/paywithcash for instructions on how to pay with cash.

• Installment agreement . Taxpayers who are unable to pay their tax debt immediately may be able to make monthly payments. Before applying for any payment agreement, taxpayers must file all required tax returns. They can apply for an installment agreement with the Online Payment Agreement tool, which also has more information about who’s eligible to apply for a monthly installment agreement.

Anyone wishing to use a mobile device should remember they can access the IRS2Go app to pay with either Direct Pay or by debit or credit card. IRS2Go is the official mobile app of the IRS and is available for download from Google Play, the Apple App Store or the Amazon App Store.

Taxpayers can also visit IRS.gov/account and log in to their account. From here, they can view their taxes owed, payment history, federal tax records, and key information from their most recent tax return as originally filed.